BUSINESS FOCUS
though the market has contracted by 63 per cent since 2007. The independents are getting squeezed,
which isn’t entirely a bad thing for the quoted sector. Winkworth has seen a huge increase in interest from independent estate agents wanting to convert to the Winkworth franchise – from just eight applicants in the first half of 2010 to 35 so far this year. There will probably be more infill acquisitions in the next year or so, too, like Savills’ purchase of property management firm Stadsmuren. Alan Collett, comments wryly that, “It’s
always hard to acquire businesses when the market is booming. So the sensible business does try to acquire when the deals are available.” He advises other firms, “If you’ve got the cash then deploy it!” Most of the more successful agents have
diversified, too. LSL has been particularly successful with its ex-Halifax offices, which doubled their lettings revenues and quadrupled their finance sales between the first and final quarters of 2010 (LSL’s own businesses grew 12 per cent and 35 per cent). Fund management has been profitable for Savills, and many firms have
Alan Collett: “If you’ve got cash, deploy it!”
seen good returns from property management activities. But perhaps the most striking feature of
recent results announcements has been the extent to which it’s central London which is driving the market in both commercial and residential property. “Prime London residential markets have been seen as a haven for the world’s investors,” according to Jeremy Helsby, group chief executive at Savills. David Fletcher, chairman of Fletcher King, refers to the market as
“strongly polarised” between London and the provinces – while London is strong, “elsewhere in the country the market is very patchy,” he says. Meanwhile Sir John Ritblat at Colliers
quotes prime rents up by 28 per cent in the City and 10 per cent in the West End, with overseas investors seeing UK property as a “safe haven”. But, he says, the provinces are falling behind, as are secondary properties. Winkworth, too, is seeing profits growth driven by higher value properties. That suggests it’s only the most expensive ten per cent or so of the market that is selling – entry level properties are not. That makes the market look very fragile.
Smaller houses and flats in less desirable areas just aren’t moving; and outside the magic circle of London and a few spots in southern England, the market seems to be becalmed. There’s just a single bright patch in this market, on which all the quoted agents’ profits depend; and if anything happens to darken that one bright patch, there will be blood.
Do you have any views to share?
www.propertydrum.com/articles/quotedagencies
PROPERTYdrum DECEMBER 2011 25
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