Segmental reviewsThe <strong>Savills</strong> Group advises on commercial, rural, residentialand leisure property. We also provide corporate finance advice,investment management and a range of property relatedfinancial services. Operations are conducted internationallythrough four business streams:Transaction AdvisoryRevenue£310.0m +13%<strong>2012</strong>2011201020092008Contribution to Grouprevenue38%Transaction AdvisoryRest of Group<strong>2012</strong> showed a significant difference in performance between thefirst and second half of the year, as normal business seasonalitywas increased by stronger H2 performances in both Asian and UKcommercial markets. This, together with progressively strongerperformance from recruits and acquisitions of the recent past,resulted in the underlying profit margin of the Transaction Advisorybusiness increasing to 10.6% (2011: 8.8%).Asia Pacific CommercialAs anticipated, the Asia Pacific Commercial business enjoyeda significantly stronger second half of the year as investmentmarkets adjusted to the impact of progressive governmentcontrols over residential investment in Greater China, whichresulted in stronger demand for commercial assets by privateinvestors, particularly in Hong Kong. Revenue grew by 23% to£98.4m (2011: £80.2m). On a constant currency basis, thisrepresented an increase of 21% year on year.In mainland China, where we have 12 offices, our businesscontinued to grow well with Transaction Advisory revenuesincreasing by over 13% year on year as some significanttransactions occurred during the final quarter. Our Hong KongCommercial business increased revenue by just under 24% as webenefited from increased private investment into commercial realestate assets. Our Japanese business grew transaction revenueby over 130% on renewed activity in the region and the Japanesebanks’ relative willingness to provide debt for acquisition andre-financing transactions. Our businesses in Australia, Singaporeand Taiwan all increased transaction revenues which made up forshortfalls in Vietnam and relatively stable performances elsewhere* Refer to definition on page 17.310.0 <strong>2012</strong>275.3 2011270.7 2010197.5 2009208.4 2008Underlying profit before tax *£32.8m +36%Services6.33.2AcquisitionsDivestmentsLeasing and rentalsSales and leasebackCapital raising32.824.230.8in the region. Overall, the Asia Pacific Commercial TransactionAdvisory business recorded a 30% increase in underlying profitto £14.6m (2011: £11.2m). The increase in underlying profit inconstant currency was 28%.UK ResidentialThe prime residential market, where <strong>Savills</strong> is a market leader,continued to perform well with <strong>Savills</strong> acting on a similar numberof sales of existing homes as last year (exchanges up 2% year onyear). In the Prime Central London market volumes decreased byapproximately 7% year on year in the light of changes made tostamp duty and the taxation on foreign and corporate owners ofresidential property. Transaction volumes in the country marketincreased by approximately 5%, with the biggest rise being inproperties just below the upper threshold for stamp duty (£2m).In the new homes market we saw a significant increase intransactions, buoyed by continued strong overseas interest in highquality developments and good levels of stock availability. A goodexample was the Fitzroy Place development in Central London,which resulted in the single largest volume of sales by <strong>Savills</strong> inone weekend of marketing in Hong Kong and Singapore. TheResidential Transaction Advisory business increased revenueby 2% to £97.0m (2011: £95.0m).Despite reduced volumes in London, price growth remainedover 5% for the year, although there is evidence that the driversof growth are the core Prime Central London locations ofKnightsbridge, Chelsea, Mayfair and Belgravia, where <strong>2012</strong>represented a record year for properties over £5m, with volumesup approximately 14%.Despite its relative strength as a market, <strong>Savills</strong> sales volumesin Central London remain 25% below the 2007 peak. In thebroader market the availability of mortgage finance remained asignificant obstacle for buyers and transaction volumes continueto reflect this. There is, however, some evidence of movementfrom London to the Home Counties, as the relative buying powerof a London householder in the country market is significant.During the year we opened new offices in Notting Hill andChelsea and rationalised some regional office space as partof the <strong>Savills</strong> UK merger.The Residential Transaction Advisory business, as a whole,recorded slightly reduced underlying profits of £14.7m(2011: £14.8m).UK CommercialRevenue from UK commercial transactions increased 26% to£60.4m (2011: £47.9m). This performance reflected significantgains in our share of Prime Central London transactions duringthe year. During the strong fourth quarter <strong>Savills</strong> advised on onein four transactions in this market. As we anticipated, tradingconditions in the first part of the year were relatively weak, butthe Central London market strengthened through the second half,with market volumes in the fourth quarter up 87% year on year.London continued to be the focal point for overseas investmentinterest in both prime retail and office properties. The same wastrue of the occupier market which, in London, started quietly andrallied through the year with take up in the City market finishing18% up on 2011. Take up in the West End remained somewhatlower than the previous year. Regionally, the investment andoccupier markets remained relatively subdued outside the primeretail and office sectors. Outside London, we benefited fromimproved market share, particularly in the retail sector, inmarkets which remained weaker than the previous year.18<strong>Savills</strong> <strong>plc</strong> <strong>Report</strong> and Accounts <strong>2012</strong>
EatonSquare,LondonWe were involved in over70% of all sales in EatonSquare in <strong>2012</strong> and wereresponsible for the saleof the largest apartment.Our business Our governance Our results<strong>Savills</strong> <strong>plc</strong> <strong>Report</strong> and Accounts <strong>2012</strong> 19
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