Strong Australian demand helps Knight Frank post profits up 10%
The Australian office of Knight Frank has been commended as a strong performer after the UK-based real estate group delivered a 10% increase in profits for the 2011 financial year.
During the year Knight Frank continued to grow its Australian operations.
The Australian office now has more than 620 employees in Australia and operates from 22 locations. During the year it acquired M² Office Leasing, a commercial leasing business active in North Sydney and Macquarie Park.
Stephen Ellis, executive chairman of Knight Frank Australia, says there was a high level of activity in the Australian market last year.
Notable successful campaigns run by Knight Frank over the last 12 months include the sale of the Woollahra Hotel for more than $16 million and the sale of the Coles-anchored Cove Hill Shopping Centre in Hobart for $13.2 million. Significant leasing deals arranged by Knight Frank include MTAA Superannuation Fund leasing nearly 9,000 square metres of office space to Comcare in Canberra.
“Knight Frank continued to grow its Australian operations, building its agency business on top of a strong management and valuation platform,” Ellis says.
“Last year we recruited a number of key personnel in investment, office and industrial services, particularly on the east coast. We also recruited a six-person project management team in Sydney, as we continue to invest in accordance with our three-year plan.”
Knight Frank delivered global profits before tax of £101.9 million ($156.5million) for the year ending March 31, 2011, compared with profits of £92.3 million ($141.7 million) in the previous 12-month period.
The strong bottom line result was achieved on the back of a 7% increase in turnover to £308.4 million (AU$473.6 million) compared with £288 million ($442.2 million).
Commenting on the global results, Nick Thomlinson, senior partner and chairman of the Knight Frank Group, says the real estate group’s European business has traded profitably in difficult markets and it has continued to expand its operations in Asia Pacific, “with strong performances in Australia, India, Greater China and Singapore”.
“Our global strategy remains focused on organic growth in key markets with the best people. This year we have opened offices in Dubai, South Africa, Austria and Switzerland and expanded our network in China, Australia, India and the UK,” he adds.
While the prime central London residential market strengthened (capital values are up 9% and rents up 17% over the reporting period) Knight Frank warned of significant headwinds facing the UK residential market, with the regions furthest from London likely to be most affected by weaker economic performance and consumer confidence.
According to Knight Frank, the key trend across the prime European markets has been for activity to be concentrated in the more established rather than emerging markets.
“Good examples of this include locations like Tuscany, southern France, Switzerland and Paris, which have all seen strengthening demand over the past 12 months – something we expect to continue into 2012,” it says.
Looking ahead, Thomlinson predicts another strong year despite “some uncertainty in the financial markets”.