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Estate agent Savills boosted as Covid fuels demand for bigger homes and warehouse space
Estate agent Savills’ shares stormed higher as it raised profit guidance amid a boom in demand for expensive homes.
The stock soared 8 per cent, or 105p, to 1425p after performance for 2021 came in ‘very significantly ahead’ of expectations following an ‘extraordinarily strong’ final two months of the year.
The FTSE 250 group, which sells residential and commercial property, has also been boosted by warehouse space sales as the boom in online shopping and supply chain woes left firms scrambling for storage space.
Savills soared 8% after figures for 2021 came in ‘very significantly ahead’ of expectations following an ‘extraordinarily strong’ performance in the final two months of the year
Properties currently for sale on its website include a seven-bedroom house with a swimming pool and gym for £39.5million in Knightsbridge, London, and an Oxfordshire estate for £23million.
‘The UK prime residential market continued to perform exceptionally strongly through the last quarter,’ Savills said. It added that a shortage of houses to sell meant activity was likely to moderate this year.
It noted ‘substantially lower levels’ of spending on travel, entertainment and marketing, left buyers with more cash to purchase properties.
As a result, profits were expected to be ‘very significantly ahead’ of the previous forecast.
Analysts at broker Peel Hunt predicted the figure could be between £190million and £200million, up from £96.6million in 2020.
Anthony Codling, chief executive of property data site Twindig, said while the UK housing market ‘made hay’ during lockdown, the opening up of the economy and relaxation of travel restrictions would cause buying patterns to normalise.
Estate agents and builders have cashed in over the pandemic as a demand for bigger homes and a stamp duty holiday sent buyers flooding into the market.
AIM-listed peer Winkworth jumped 6.2 per cent, or 12p, to 207p after it predicted profits for 2021 will be ahead of forecasts.
London-focused Winkworth flagged ‘brisk’ sales activity in the final quarter, saying sales for 2021 were 13 per cent higher than 2020 and 42 per cent above 2019 levels.