Savills (LON:SVS) executives told investors the group’s latest results “exceeded expectations” after a strong finish to the year and highlighted a major strategic development: an agreement to acquire U.S.-focused real estate investment bank Eastdil Secured.
Results beat expectations after a strong year-end finish
Chief Executive Officer Simon Shaw said performance improved materially late in the year following “volatile” conditions driven by geopolitical and macroeconomic factors, particularly in the second and third quarters. Shaw said that in profit terms the company overtook the “clean pre-COVID year of 2019,” despite what he described as Savills’ “transaction machine” still operating below full strength.
Management also highlighted improved earnings per share and cash generation, which supported a proposed 12% increase in the dividend.
Segment performance: transaction headwinds offset by services strength
Shaw said transactional revenue growth benefited from a “burgeoning” prime international residential business and resilience in the U.K. residential market. By contrast, performance in commercial advisory was impacted by Savills’ relative exposure to China and weaker continental European markets such as Germany and France (which management described as recovering), as well as low exposure to U.S. capital markets during a year when global volumes were boosted by a surge in U.S. activity.
He noted that Savills’ small-cap transactions team in New York grew revenues by 58% but remains small in the context of the overall group—an issue he later tied to the strategic logic of the Eastdil combination.
Less transactional businesses delivered what management described as “a really good performance,” with consultancy growth at the upper end of expectations, solid property and facilities management, and Savills Investment Management emerging from a prior-year trough as that investment style returns to favor. Shaw also described the company’s valuation business as benefiting from both growth and greater use of technology to improve efficiency.
Regional snapshot: EMEA rebound, Asia resilience, North America improvement
On a regional basis, management emphasized growth “across the board” with differing drivers:
- EMEA: Resilient U.K. performance that was “back-end loaded,” plus a return to profit in continental Europe and the Middle East following reduced losses in Germany and France and improvements elsewhere, including Southern Europe and the Middle East.
- Asia-Pacific: Resilience despite China exposure; Shaw said Savills was number two in capital transactions in mainland China and completed four transactions in the last month of the year. He said the region benefited from a strong property management business, while Japan activity was lower and Australia investment (including leadership changes and team upgrades) weighed on profits because teams were not yet covering their cost. He cited growth in consultancy, a return to profit in project management, and growth in APAC residential as offsets.
- North America: Improving revenue and the impact of cost savings, despite continued investment in brokerage and global occupier services. Shaw also referenced acquisitions including Move Management Consultancy and “Hoffman” as contributors to results.
Shaw highlighted restructuring costs of just over £30 million, with additional “trailing” costs expected to fall into the first half of the new year. He said the company is “broadly now in the right shape” organizationally following the process.
Outlook: strong pipelines, but geopolitical uncertainty
Looking ahead, Shaw said momentum built through the fourth quarter and that pipelines early in the year were the healthiest in most locations, with notable exceptions including China and the U.K. residential market (which he described as stable and performing well under the circumstances). He added that less transactional businesses continued to perform as intended and that the company remained focused on cost control.
However, he said it was “impossible to forecast with any accuracy” the potential impact of conflict in the Middle East and any broader contagion, noting a focus on staff safety in the region. Subject to how conditions evolve, Shaw said Savills was “pretty well placed” to improve performance in 2026.
Eastdil acquisition: “superpower” the platform and expand U.S. capital markets
The central announcement was Savills’ agreement, subject to regulatory approvals, to acquire 100% of the equity interests of Eastdil Secured Holdings LLC and affiliates for £685 million in a 60/40 cash-and-equity mix. Shaw said Eastdil’s current shareholders include Temasek, Guggenheim, and Wells Fargo, and that 85 senior employees would be subject to lockup arrangements on shares, which management said aligns incentives over the long term. Shaw also stated there was no intention to make redundancies or change compensation arrangements in either group as part of the deal.
Shaw described the combination as highly complementary, citing limited overlap in services, locations, and clients, and emphasized cultural alignment. He also said the company had taken a “very cautious approach” to the size and timing of disclosed revenue synergies.
Eastdil CEO Mike Van Konynenburg said Eastdil holds the number one U.S. market share in $100 million-plus transactions and described its model as executing roughly £200 billion a year of transaction activity with 450 client-facing professionals. He highlighted Eastdil’s debt placement ranking (number two in total debt placement in the U.S. but number one on average loan size, which he said averages $225 million) and pointed to the stabilizing role of loan sales and financing activity through downturns.
New Savills CFO Nick Sanderson presented financial expectations, including that the combination would lift total annual revenues above £3 billion and increase commercial transaction revenues by 70% on a pre-synergies pro forma basis. He said the combined EBITDA would rise by more than 50% with margin uplift of nearly two percentage points, while increasing annual operating cash generation to more than £300 million.
Sanderson also outlined conservative run-rate revenue synergies of more than £60 million a year, expected to generate more than £15 million of annual EBITDA in the medium term. Financing includes an $800 million debt facility arranged with existing lenders, with plans to refinance via a term loan and longer-dated U.S. private placement notes. On a pro forma basis, Sanderson said leverage would be 1.8x, with an expectation of meaningful reduction by year-end and around 1x leverage at the end of 2027, all else equal.
On shareholder metrics, Sanderson said Savills expects low- to mid-teens percentage EPS accretion next year before synergies, high-teens group return on capital employed by 2028, and low-teens unlevered pre-synergy returns on invested capital in the medium term, which he said would be ahead of the group’s weighted average cost of capital.
In a Q&A exchange on timing, Shaw said “the stars have aligned” and argued that the combination’s fit—culturally and strategically—made it compelling “now.” Van Konynenburg said the market cycle appeared to be turning, and being positioned as activity accelerates could create a “flywheel” of business. Management said long-term targets were intended for a medium-term timeframe of roughly three to five years.
About Savills (LON:SVS)
Founded in the UK in 1855, Savills is one of the world’s leading property agents. Our experience and expertise spans the globe, with 600 offices across the Americas, Europe, Asia Pacific, Africa and the Middle East.
Our scale gives us wide-ranging specialist and local knowledge, and we take pride in providing best-in-class advice as we help individuals, businesses and institutions make better property decisions.
