Savills expects Europe property markets to remain subdued

SAVILLS has said it expects European property markets to remain unsettled and very subdued in countries like Italy and Spain, as it posted a four per cent fall in first-half group profit before tax.

The property consultancy said yesterday that underlying profit before tax fell to £19.7m in the six months to June, down from £20.6m in the same period last year. Group revenue rose five per cent to £353.3m.

Savills said its first-half performance was better than it had anticipated due to the growth of its consultancy and property management businesses, which now make up 60 per cent of income and profits. It also said it had cut losses in its continental European business.

“Looking to the second half, we currently see no material change in the overall outlook for our business,” group chief executive Jeremy Helsby said.

“In Continental Europe, we expect transaction markets to remain unsettled in core markets and very subdued in southern Europe,” he said, adding that he expects activity levels in Asia to improve across its core markets.

Savills and its property peers have been hit by the Eurozone debt crisis and government red tape in Asia which have crimped property deal activity over the past year.

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