Savills plc - Investor relations

Housing ConsultancyThe Housing Consultancy department now operates from four officesnationally with approximately 35% of turnover from repeat annual valuations.We continue to increase the range of advice on offer as our customersdiversify and move into or devise new forms of tenure. In Kingston Upon Hull,we completed the first stage of an asset management strategy for theCouncil's 32,000 housing stock. In north London, we advised a housingassociation on a 950 unit mixed tenure residential redevelopment of anex-council estate and in Bradford we provided valuations for the six new sociallandlords acquiring the Council's 25,000 homes.The Affordable and Student Accommodation Projects team is a newdepartment to service growing demand for affordable, key worker and goodquality student housing.Key projects in 2003 include:• advising several major developers with regard to the Section 106 affordablehousing elements of their projects;• advising on the acquisition and disposal of two major studentaccommodation portfolios; and• disposing of four mixed-use development sites that emerged fromadvising our public sector clients.ResearchThe Research team has been key in providing vital information and predictionsin all sectors of property, to a wide variety of clients, covering development,investment, government, and housing associations. Our feasibility studieswere not confined to residential; major projects included an economicoverview of Belfast for a report addressing the forward funding of a £250mshopping centre and analysis for a public inquiry into the likely demand forover 1m sq ft of offices within Croydon town centre.Research consultancy services were provided on several large, strategicresidential-led schemes which will deliver in excess of 15,000 new housingunits.Outside the UK, we recently contributed to the due diligence report for theacquisition of an office building in Milan. We have completed the first stageof advising, on the feasibility of the development of an internationalstandard business park and retail scheme as part of a 1.1m sq m mixed-usedevelopment in Cyprus and we recently advised a major internationalshopping centre developer on the feasibility of the development of a 47,000sq m out-of-town retail scheme in Greece.Property ManagementThe Property Management business continued to perform in line withexpectation, generating fee income from managing commercial, residentialand agricultural properties for owners. During the year, turnover was £57.8m(2002 - £56.4m), generating a profit before interest and tax of £3.9m(2002 - £3.1m).Commercial and Residential ManagementThe Commercial Management business has continued to perform stronglyboth throughout the UK and Europe. We have continued to invest in thebusiness through recruitment and have expanded the teams in Glasgow, theWest End and City offices as well as centralising our Management Accountsteam in Manchester.The business continues to focus on the management of central London officeproperties for German open-ended funds, including properties on PaternosterSquare and the recently completed Victoria Plaza. The team also managesUK funds (including Diageo and Charities) and Henderson's expandingportfolio of retail warehouse properties.2004 will see the formation of a further team specialising in Shopping Centresand strengthened links with our offices in Paris, Madrid and Amsterdam haveresulted in European wide management instructions for various clients.The Property Management businesses in Asia were able to maintain 2002profit levels despite increased competition and fee cutting, through acombination of cost cutting and securing additional contracts. Withcommercial office rents expected to rise in Hong Kong, pressure on feelevels from landlords is anticipated to reduce in 2004.Property management income in China has grown by over 27% in 2003on the back of a strong agency presence and growing demand forprofessional property management services on the mainland. Elsewhere inAsia, FPDSavills has closed the Agency businesses in Thailand and thePhilippines, and has taken measures to reduce staffing and costs inSingapore.In Australia the business suffered from extremely high insurance premiumcosts and a high cost structure in its Property Management business, boththese issues have been addressed.19