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Is Savills about to be snapped up by US real estate company?

The Daily Telegraph has gone public with City speculation that Chicago-based real estate consultancy JLL may be interested in buying Savills.

Both JLL and Savills are primarily commercial property businesses but - as was the case in Strutt & Parker’s acquisition by BNP Paribas in 2017 - a residential business could continue under new ownership.

The Telegraph says speculation in stock market circles has been fuelled by comments made by JLL boss Christian Ulbrich, who recently told analysts that he has “never seen a market which has so many availabilities with regards to mergers and acquisitions.”

He added that JLL was in the process of “analysing the different opportunities”, especially for companies “currently interested in finding a new home”. 

The Telegraph says traders speculated that Savills could be a target following a share slide: in January 2018 its share price was over 1,030p but fell to below 680p late last year. More recently it has recovered some ground and but in yesterday’s trading it lost over two per cent.

Savills itself has told Estate Agent Today: “We do not comment on speculation and rumour.”

Savills’ most recent trading statement, a month ago, showed that it was not immune to some of the difficulties facing other residential and commercial real estate operators.

It warned: “Prospects for 2019 are overshadowed by macro-economic and political uncertainties across the world. It is difficult accurately to predict the impact of these issues on corporate expansionary activity and investor demand for real estate. 

“At this stage, we expect to see declines in transaction volumes in a number of markets, the impact of which, to Savills, should be largely mitigated by growth in our less transactional business lines.”

In the same statement it said: “Our [UK] Residential business continued to perform well growing market share in challenging conditions and our less transactional Consultancy and Property Management businesses, in the UK and globally, performed in line with our expectations.”

Savills is itself no stranger to mergers and acquisitions.

Set up in London in 1855, the company floated on the stock market in 1988. In the late 1990s it merged with First Pacific Davies and became - for some years - FPD Savills.

In more recent years it snapped up rural agency Smiths Gore and, through a proprietary investment subsidiary, has acquired a minority stake in online agency Yopa. Just a few weeks ago it announced its acquisition of London estate agency Currell.

It has been at least as acquisitive on the commercial side, with recent years seeing it snap up Larry Smith Italia in Italy, and the Spanish and Portuguese real estate giant Aguirre Newman SA.


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