(Alliance News) - Savills PLC on Wednesday said trading so far in 2026 has been ahead of expectations, though it kept guidance unmoved amid Middle East uncertainty.
London-based firm said real estate investment growth is being spearheaded by the US, where it only has a "limited exposure" until it seals the buy of Eastdil Secured Holdings LLC. It announced the GBP827 million acquisition in March and it is expected to be sealed around the end of July.
The firm said: "Overall trading for the year to date has been marginally ahead of the board's expectations, notwithstanding the heightened levels of geopolitical volatility and, especially outside the US, significant uncertainty around the effect of the current Middle East conflict on interest rates. Whilst mindful of these uncertainties, the board's expectations for 2026 remain unchanged."
Savills shares fell 1.1% to 824.00 pence each in London on Wednesday morning.
"In EMEA, following a strong second half in 2025, market investment declined by 4% year-on-year in Q1 2026 on a constant currency basis, including a 3% decline in the UK market. In Asia Pacific there has been a strong start, with investment increasing 16% year-on-year on a constant currency basis in Q1, underpinned by broad-based growth across most major sectors and markets," Savills said.
"Against this backdrop, Savills Commercial Transactional Advisory business continues to build healthy pipelines and delivered a solid performance in the first quarter. Across EMEA, both commercial capital markets and leasing volumes are performing in-line with expectations. There has been a significant recovery in capital transaction revenues in our Asia Pacific region, including a particularly strong start to the year in Hong Kong and improvement in Mainland China. Our North American business, which is predominantly occupier-focused today, delivered in-line with expectations, supported by some larger transactions in the period, and has a strong pipeline."
The real estate services provider said in the Savills Residential Transactional Advisory arm, it has seen "greater caution" in the UK since the start of the Middle East conflict. This has meant longer transaction completion timeframes, though there has not been a "corresponding rise in fall-through rates"
"In the Middle East approximately half of the region's underlying profit is Transactional and primarily from residential sales, which have slowed materially during the crisis. The remainder of the business is predominantly Consultancy and Property Management activities which remain resilient. In total, the Middle East represented approximately 5% of group underlying profit before tax in FY25," Savills added.
Savills expects to see more extended timeframes for capital advisory transactions, similar to a year ago when the market was hit by tariff nerves. Just like last year, the firm expects to see a "similar strengthening in market activity in the second half", should the Middle East conflict end in a resolution.
"For our Residential Transaction Advisory business, we are assuming somewhat reduced transaction levels to continue in the UK market, and for the slow down in sales activity in the Middle East to temper the performance of our growing International Residential business. We expect our Less Transactional businesses to continue to perform well," the firm added.
"Savills has strong foundations and a robust financial position. On the basis of a timely resolution in the Middle East, the board continues to expect the group will perform in-line with its expectations for 2026, with the split of underlying profits between the first half and second half likely to be broadly similar to 2025."
By Eric Cunha, Alliance News news editor
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