Savills expands in the US with investment bank acquisition

Savills’ (SVS) full-year results were overshadowed by its announcement of the £685mn acquisition of real estate investment bank Eastdil Secured, but that doesn’t mean they were devoid of interest.

The property services company reported underlying pre-tax profit of £145mn on revenues of £2.55bn, up 11 per cent and 6 per cent versus the prior year, respectively, in line with what the company had guided for in its January trading update.

The company attributed the increase in the pre-tax profit margin to operational gearing and the benefits of a restructuring.

The consultancy business delivered the strongest revenue growth, up 11 per cent to £546mn, while revenue from the property and facilities management business increased by 6 per cent to £943mn.

Growth in transactions was more modest, up 4 per cent to £966mn. Savills’ commercial business underperformed 2025’s 15 per cent increase in global real estate investment, partly due to its lack of exposure to the US, where growth was strongest. The company hopes that the Eastdil transaction will rectify this.

Residential transactions, meanwhile, suffered due to a sluggish UK housing market, particularly at the prime end. Both revenues and pre-tax profit fell in this business.

Savills did not issue quantitative guidance for 2026, perhaps unsurprisingly given the Eastdil transaction, but noted that it had seen “continued momentum across global real estate markets during the first couple of months of 2026”.

The company looks cheap on nine times analysts’ 2027 earnings estimates, which do not account for the Eastdil acquisition. It should be positively geared to a continued recovery of global commercial real estate volumes, should ongoing events in Iran not disrupt them. Given this is by no means certain, we remain cautious for now. Hold.

Last IC view: Hold, 913p, 14 Aug 2025