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London’s healthy property market is having its own positive effect on the industries related to real estate. Savills, the property services company, announced figures for last year that showed increased sales both at home in the UK and abroad.
Its global sales rose to almost £905 million, up 12%, with its pre-tax profits reaching £70 million – an increase of 35%.
A notable contributor to these figures is the London commercial property market, which has been steadily increasing in value and in terms of transactions over recent years. There have been a significant number of high-value transactions, as well as an increased volume of transactions overall. Figures demonstrate that the company was involved in almost one-third of London office transactions during 2013, and where one of the transacting parties was from Asia or the Middle East – countries that have been investing heavily in London over the last few years – Savills was linked to almost 40% of transactions.
Profits from commercial property have increased by 58% and to accommodate and reflect this situation – which experts believe will continue to an extent throughout 2014 – Savills opened three new UK offices.
The rocketing residential sector in London is also a factor in Savills’ strong figures. Transaction profits here have increased by 34%, and may do so even further if London prices continue to rise as a result of factors such as the changes in planning legislation (allowing offices to be converted to residential use without planning permission), Crossrail and Help To Buy, among others. The transaction volume in the capital for residential property currently lies 15% below the peak that was seen in 2007 before the financial crash that followed.
Outside the UK the best-performing countries, which offered the best rewards, were Australia, Korea and Japan. The Hong Kong market remained weak while East Asian commercial transactions as a whole contributed to a 14% rise in profits.
Not unsurprisingly, European commercial property markets were less of a success story, although there was a rise in sales, and losses were down in comparison with the previous year.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.