International property broker Savills reported a 61 per cent fall in underlying pre-tax profits to £33.2 million today as activity in Europe's catatonic property market plumbed "unprecedented" depths.
The London-listed agent, which has more than 200 offices and affiliates worldwide including Ireland, said a collapse in real estate transaction volumes has forced it to recommend a reduced final dividend of 3 pence per share, slashing its full 2008 dividend to 9 pence versus 18 pence in 2007.
Savills said it had made cost savings of £22 million during 2008, partly due to redundancies, office closures and tighter control of overheads.
Sketching out a cautious outlook for the year ahead, chief executive Jeremy Helsby said transaction volumes would continue to fall until a shortage of mortgages -- the grease for the wheels of the real estate market -- was replenished.
"We believe that the volume of transactions in 2009 will be significantly lower than in recent years," Helsby said.
"In Europe property values have not fallen as far and as quickly as in the UK with the result that there remains a mismatch between vendors expectation on price and buyers' requirements. Until this gap is reduced, transaction volumes in Europe will remain low," he added.
Average UK commercial property values have dropped by 40 perc ent since a pricing bubble burst in mid-2007. Values are forecast to fall by a further 18 per cent this year, according to consensus data from trade body Investment Property Forum.
Reuters