Consultancy

Consultancy

Our Consultancy business covers a wide range of professional property services including:

• Valuation – a professional service typically focusing on valuations for bank lending purposes.
• Building Consultancy – providing a wide range of advice on all aspects of building including structural surveys and advice on fitting out.
• Housing Consultancy – advising housing associations and institutions on all aspects of housing including affordable housing and student accommodation.
• Landlord and Tenant – advising on all issues stemming from rent review and lease renewals.
• Town and Country Planning – comprehensive service advising on all aspects of planning including assisting with planning appeals.
• Research – a highly regarded research department providing research capabilities including reports on specific markets for clients.

Performance in 2007

We increased the revenue of our Consultancy business in 2007 to £141.5m, an increase of 43% (2006: £98.8m). Underlying profit before tax increased by 39% to £22.3m (2006: £16.1m). The strong performance reflects the long-term investment in this business. Margins are slightly down reflecting both the investment being made and salary pressure in this growing market.

Our UK Commercial Valuation team increased revenue by over 45% and we are now one of the leading valuation practices in London. In Europe, we valued assets in excess of €5.5bn and our clients included both UK based and international lenders, together with a number of European funds. In March 2007, we set up a new London based European Valuation team, focusing on valuation instructions outside of the UK. This new team had an excellent first year working closely with all our Valuation teams across Europe. During 2007, we expanded our Valuation teams across the network. Working with our European Valuation team, our local European teams had a good year. The biggest growth was in Germany where our valuation revenue in 2007 increased four-fold compared to 2006. We now have a team of 23 valuers in Germany based in Frankfurt and Berlin, servicing both domestic and international clients. Elsewhere we recruited into all our existing teams with a particular focus on Italy, the Netherlands and Sweden.

2007 was another busy year for our UK Residential Valuation team. We have seen particular growth in loan security valuations and have provided valuation advice to over 80 lending institutions. Due to Savills’ size and reputation we are benefiting from a tightening of lenders’ approved valuers panels.

Our UK Housing Consultancy team also had another strong year, specialising in stock condition surveys and procurement advice to local authorities and housing associations. We are a leading provider of these specialist services and last year we carried out a record number of surveys and substantially increased ourmarket share in providing procurement and investment advice.

Our UK Landlord & Tenant team is one of the most experienced in the country. We were retained on over 100 retail and shopping parks including 25 of the top 100 UK schemes. Our high calibre staff in London, Birmingham and Manchester have continued to be involved with some of the highest value single let office and industrial/warehouse properties throughout the country.

Our specialist UK Business Rates team had an exceptionally busy year making significant savings for clients in respect of their ongoing and future rates liabilities. The changes in the 2007 budget to reform the Empty Rates Relief System provided additional business as we advised clients on how to mitigate their rates liability in light of the new legislation.

Following the acquisition and integration of Hepher Dixon at the start of 2007 we are now one of the largest and most diverse planning consultancy businesses in the UK, based in 13 locations throughout the country. We continue to build on the strength in our housing, commercial, retail and mixed use sectors and expanded into other important areas including public sector, environmental and urban design, the water industry, healthcare and airports.

Our planning specialisation in renewable energy is contributing to the build up in value in Infinergy Limited, a company set up to acquire consents for wind farming in which Savills has a 50% stake.

In Asia, the growth in the professional services markets remained strong throughout the year. We saw significant growth of our businesses in Hong Kong, Macau, China and Australia. We are the leading valuer for IPOs in Hong Kong. During the year our expansion in to mainland China and the addition of new offices in Vietnam enabled us to offer our services to a wider market.

Key achievements

High profile valuation instructions in Europe included a €1.7bn portfolio of German office buildings, a €200m portfolio of around 60 office buildings in France and a portfolio of retail schemes in Sweden and Finland.

In the UK, the Retail Planning Consultancy team obtained planning permission for new floorspace at Cleveland Retail Park for Hammerson and promoted a retail park in Southend as part of the football club’s proposals.

Our London Planning team continued to secure permissions to expand and add value to the already large and award winning Arsenal Regeneration Area, around the new Emirates Stadium. This includes 2,600 new homes, together with business, retail and leisure space.

Our Regional Planning teams are engaged in a number of high profile projects including Wellington Place, a 2m sq ft mixed use development for MEPC in the new ‘west end’ of Leeds. The diversity of our planning work is exemplified by winning consent for Bio Ethanol Ltd for a new production plant in Lincolnshire, and we continue to act for six water companies, three wind farm developers and several utilities.

Building Consultancy’s Industrial team has targeted the large shed developers and are working successfully with Gazeley and Industrial Securities on new developments, both speculatively and occupier led. We are continuing to grow our due diligence and project monitoring service with repeat instructions from Met Life Investments and CBRE Investors, as well as new work with Industrial Securities in Europe. We are also targeting end users directly and have provided project management support for Asda Walmart on a number of schemes. We have continued to develop our service into Europe, providing strategic project advice for some of our developer and fund clients. Europe continues to offer considerable potential for our business growth.

Our Project Management team enjoyed a successful year and notable projects secured have included head office refurbishments for Benfield Group Ltd, Symbian Software Ltd and Zurich Insurance Company (UK) Ltd.

Our Leisure team have been instrumental in advising on several significant merger and acquisition projects in the hotel, leisure and the childcare sector in the UK and continental Europe.

Our UK Residential Valuation team has been involved in providing valuation advice to one of the four shortlisted parties for the acquisition of the £800m National Grid portfolio.

The recruitment of a 35 person valuation team in China and Hong Kong in 2006 has proved to be successful and the teams were active in the numerous IPO listings that took place during the year. In Beijing, Savills were appointed as the consultant of Wanda Plaza a 680,000 sq m mixed use complex in the Chaoyang.

In Australia, our Valuation team continued to provide valuation services on an annual basis to many of the Australian property listed trusts.

Future plans

Over the past few years we have broadened the range of consultancy services we offer and reinforced this with key acquisitions. We will continue to pursue this approach in 2008.

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