Savills said it expects to see underlying market improvements in the first half of 2024, which should set the course for broader recovery in most of its markets during the second half of the year.

The estate agency said in its year-end trading statement that it performed “in line with expectations” in 2023, after a “prolonged recalibration of markets”.

The company said its overall full-year group performance for the year ending 31 December 2023 will be in line with the expected range of outcomes.

Savills said strength across its less transactional service lines continued to provide a resilient earnings stream, with the group’s consultancy and property management businesses performing well, underpinning Savills overall performance. Consequently, the Group expects that its full year performance for 2023 will be in line with the expected range of outcomes.

Savills intends to report 2023 full year results on 14 March 2024.

The market consensus is that Savills will generate underlying profit before tax of £91.3m, or between a range of £85m and £97.1m.

The firm said it expects these market improvements, together with its restructuring programme, to lead to “substantive overall improvement in performance in 2024” and set the foundation for further improvements in future.

Savills said its investment management business traded in line with our expectations although deployment of capital was inevitably reduced given lack of price transparency in most markets.

As a result of prevailing market conditions during 2023, the real estate services industry as a whole undertook a number of rounds of significant cost reduction and reorganisation actions,” Savills said in a statement.

“In line with our strategy during the Global Financial Crisis, as well as more recently through the pandemic and supported by our strong financial position, Savills continued to maintain its core bench strength ensuring that we provided the highest level of service to our clients throughout the year and remain well positioned for market recovery. We did, however, review certain markets and sectors where the anticipated time frames for market recovery remain protracted. This resulted in selective restructuring in certain transactional and support teams. Alongside this, we continued to acquire businesses and recruit high quality talent in markets which have become much more conducive to reasonably-priced business development.

“In the year ahead, challenging macro conditions are expected to continue for some time; however most markets appear to be either at, or past, the moment of peak uncertainty, with sentiment turning towards reductions in the cost of capital being likely during 2024. We expect re-financing driven activity and the sustainability agenda to be positive for transaction volumes, and thereby price transparency, in a number of markets. There also remain, for the near term at least, questions over office utilisation in certain locations, perhaps most keenly felt in the North American metropolitan markets of the Eastern and Western seaboards.

“Whilst it is too early to determine the 2024 outlook with clarity, we believe that H1 2024 will see underlying market improvements, which should set the course for broader recovery in most of our markets during the second half of the year. This, together with the benefit of our targeted restructuring programme, should lead to substantive overall improvement in performance in 2024 and set the foundation for further improvement thereafter, when the group’s performance should more clearly reflect our globally diversified and strengthened position in many markets.”