Savills trading update

Savills, the international property adviser, is pleased to announce a trading update for the half-year, prior to the interim results for the first half of 2002, which are scheduled for release on 4 September 2002.

The property investment markets throughout the UK remain strong with significant demand for property from domestic, private and institutional as well as overseas buyers. This increased demand reflects in part investor’s lack of confidence in the stock markets.

Tenant demand in London and the South East is being adversely affected by the downturn in the technology based industries in particular. However outside London and the South East demand remains robust with a number of major tenants requiring new accommodation.

The European investment market continues to be very active and Savills is benefiting from its strong position in that market. In Asia the level of transactional income remains subdued and no significant upturn in activity is currently anticipated. In Australia the market has been largely unaffected by the global recession and the business should meet our expectations.

Our joint venture with Trammell Crow Company (Trammell Crow Savills) has had a frustrating half-year pursuing two potentially very large outsourcing contracts for German companies, neither of which has materialised. As a result there is a write-off of pursuit costs during the period and of capitalised costs from 2001. We are reviewing with Trammell Crow Company the future marketing strategy for TCS and are likely to concentrate on smaller scale outsourcing projects.

The Group’s principal trading arm has made a number of sales during the period showing a satisfactory investment return.

The Mill Discount Department Store in Yorkshire is trading well, but has disappointingly still not reached its full potential and we continue to make changes to the tenant mix.

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(source: FPD Savills)

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