Property Management

Our Property Management business consists of five main elements:

• Property Management - management of property for owners including rent and service charge collections via a dedicated centralised accounting function with key client accounting and reporting.
• Facilities Management - providing a comprehensive range of services to occupiers including all services relating to a building, project management and strategic advice.
• Asset Management - reviewing tenant mix, lease terms, re-branding and marketing strategies, refurbishment and development opportunities for clients’ property investments.
• Land and Farm Management - in the UK we provide a specialist service to manage agricultural land including managing farms.
• Corporate Real Estate - providing a wide range of property management advice to corporate clients managing their property assets.

2008 was a strong year for our property management businesses with significant progress made in many markets. Overall, property management revenues were £191.4m (2007: £159.7m) and underlying profit before tax was £14.2m (2007: £10.9m).

Our UK Property Management team has grown strongly through a mixture of recruitment and winning new mandates. We expanded our Corporate team, helping clients align their real estate strategy to their business strategy, maximising the value from property expenditure. Underlying profit before tax in 2008 was £4.6m (2007: £3.0m) on revenues of £45.5m (2007: £38.9m).

Europe experienced increasing margin pressure as landlords looked to reduce property related costs. As a result, although revenue increased to £21.9m (2007: £18.1m), we incurred an underlying loss before tax of £1.2m (2007: profit before tax £0.1m).

In Asia, property and facilities management is a cornerstone of our business and helps us secure additional advisory instructions as well as providing contractual income streams. During the year, we continued to expand our business and now manage 823.3m sq ft (2007: 610.6m sq ft) primarily due to growth in China.

During 2008 we increased our investment into ancillary facility management services by setting new business lines that addressed environmental and waste management issues in Hong Kong. We also diversified into other lines of business such as retirement home and serviced apartment management. In China, we concentrated on winning new business and have formed joint ventures with a number of companies. In 2008 we established a property management business in Singapore to complement our successful agency business.

Underlying profit before tax in 2008 was £8.4m (2007: £6.2m) on revenues of £109.3m (2007: £90.0m).

Our UK Residential Property Management business includes our Residential lettings business and Estates Management. The Lettings business had a very strong year reflecting the challenges in the residential transaction markets where falling prices and reduced demand created both a supply of properties to let and tenants. Our Rural practice also had another good year winning a series of new management mandates.

Underlying profit before tax in 2008 was £2.4m (2007: £1.6m) on revenues of £14.7m (2007: £12.7m).

We will continue to focus on growing our Property Management operations through winning of instructions and internal linkage to our transactional business.