Estate agent Savills said profits at its British commercial property business more than halved in the first half of the year, hit by a referendum on European Union membership, adding that it had become harder to predict the firm's full-year performance.

Commercial property was one of the first areas affected after the June 23rd referendum, with investors pulling money from funds, forcing many to be closed and more than £18 billion (€21 billion) worth of investments to be frozen.

Normalised market

Savills said that in the run-up to the vote, many of the larger sovereign wealth and private-equity firms stopped buying commercial property in central London, allowing wealthy individuals to get good deals, but that the market had since normalised.

“Now, we’re back to a more normal market where we’ve got all the big players back in the market,” said chief executive Jeremy Helsby.

Underlying profit at the firm – which operates in Britain, Ireland, Asia, continental Europe and the United States – rose 11.5 per cent to £42.8 million (€50 million) in the six months to the end of June, with other markets compensating for falling revenue in Britain.

Fee income from British residential transactions rose 10 per cent in the period but Helsby said the immediate signs were that transactions would be slightly down in the weeks since Britain voted to leave the EU.

The firm, which makes about 40 per cent of its revenue in Britain, said it was maintaining its full-year expectations but chief financial officer Simon Shaw said the range of possibilities had widened.

“We really just don’t know which direction various sub-sectors of the market are going to take in terms of volumes,” he said. “The high is higher and the low is lower.” – (Reuters)