The estate agency group Savills has reported a 3 per cent drop in pre-tax profit for the first half as commercial property transactions declined in the EU referendum period.
However, the FTSE 250 group said it was maintaining its expectations for the full year and would increase its interim dividend by 10 per cent to 4.4p.
Pre-tax profit was £25.5m in the six months to the end of June, while underlying profit — which strips out costs related to past acquisitions — was up 11.5 per cent to £42.8m from a year earlier.
Savills has fared better during the Brexit vote period than peers that are more focused on the UK residential market: Countrywide reported a 25 per cent drop in profits, while Foxtons’ net profits were down 42 per cent in the first half.
Jeremy Helsby, chief executive, said: “Looking to the second half, at this stage, in the traditionally quieter summer period and so soon after the EU referendum result, it is not possible to obtain a clear read on the direction of activity in a number of the group’s principal markets.”
He added that “the fundamental attributes of real estate as an investment class remain strong”.
Revenues increased 14 per cent to £622.7m as Savills’ international businesses delivered strong results, but a drought in the UK commercial property transactions meant fee income from this sector was down 23 per cent to £32.1m.
The group said buyers who had formerly been significant players in the central London commercial market, such as sovereign wealth funds and international private equity groups, “elected to remain largely on the sidelines” during the referendum period.
“[This] opened the way for private wealth from areas such as the Middle East to transact,” the group added.
Mr Helsby said there had been a “flurry of activity” post-referendum as commercial property funds sold buildings to meet investor redemption requests, while “signs are looking positive for the residential business, although we’ll have a better picture in September or October”.
Savills said its residential transaction fee income increased by 10 per cent to £57.2m from a year earlier, partly thanks to a rush to buy homes ahead of changes to the stamp duty regime in April.
It has been seeking to diversify its residential business from the high end into relatively less expensive London homes, bringing the average value of the London properties it sold down to £2.5m from £3m a year earlier.
The group also benefited from growth in its Asian business, which brought in revenues of £209m, a 13 per cent rise on a year earlier.