Alistair Elliott, Senior Partner & Group Chairman, Knight Frank, commented: “On the back of one of the most extraordinary years in our 125-year history, I am pleased to report a strong set of results.
“The firm’s agility and speed of reaction to the pandemic has enabled us to outperform our early financial expectations. This year has cemented our confidence in the firm’s global platform. At the heart of this is our partnership structure, which gave us the ability to plan and respond quickly. We have remained resolute in our focus on our people and the need to continue to invest in our business for the future.
“At times of adversity Knight Frank has always shown its true colours – no more so than during the pandemic, when I experienced the firm at its very best. From day one, we came together sharing early learnings from our businesses around the world, allowing us to react quickly with confidence. This firm wide collaboration continues to give us the expertise to better advise our clients across the real estate sectors.
“Our diversified offering and the early measures we took to shape the firm in anticipation of the headwinds that lay ahead underpin these robust results and record profit. Turnover is down just 7% largely due to a reduction in transactional activity across capital markets and office agency showing a far stronger position than our budgets. We planned conservatively given the global uncertainty, then adapted our position to focus on the right areas to deliver outperformance for ourselves and our clients. Notably, UK residential, and especially our country business, which saw record demand levels.
“Swift market re-engagement, in parallel with costs constraints, have resulted in our profits growing by 23% on the previous year. As a group we reduced our marketing spend, our people travelled less and our staff costs lowered – all factors that have positively impacted the firm’s profitability. Knight Frank initially took advantage of the UK Government’s furlough scheme as well as asking all our people to make a salary sacrifice – precautionary measures taken in readiness for what the firm felt may lay ahead. Yet, with markets responding better than forecasted, we were pleased to pay back the furlough grants and reimburse our people’s salary sacrifice in full. Throughout the year, Knight Frank has remained focused on being a responsible corporate entity putting people first. Our investment management business (KFIM) achieved strong profits and Knight Frank’s residential facilities management service significantly increased its income and margin. Internationally our performance in the Middle East, Hong Kong and India is especially notable.
“We remained a net recruiter, progressed our early careers programme, took on the full intern and graduate intake – as well as made a record number of promotions. We have strengthened our coverage across Africa and Europe, opening new offices in Sofia, Athens and Belgrade and announcing new partnerships in Cape Town, Lyon and North America. The firm has also backed Fifth Wall, the largest venture capital firm focused on real estate technology, with an investment into its European Real Estate Technology Fund.
“We are pleased to confirm we remain an independent partnership, debt free and with a robust platform for the future.
“The pandemic resulted in global property markets experiencing one of the most disruptive years on record. In particular – office, retail and logistic property investors and occupiers have had to reconsider their real estate strategies, while residential markets in many global hubs saw a boom in demand and pricing spurred by record low interest rates and lifestyle changes.
“We believe the coming year will see greater clarity for the key markets – as people continue to return to workspaces and cities once again take centre stage for home buyers and businesses alike. The year will also see continued growth in ESG led investment requirements and a search for income as we enter a rate tightening cycle. Investor focus will lead to continued innovation across property markets globally.
Matt Phillips, head of Knight Frank’s Cardiff office said: “Knight Frank has had a fantastic year and the breadth and depth of the business, together with our partnership approach, have again come to the fore. Knight Frank is a large international business but retains an entrepreneurial spirit that has shone through over what has been an unusual 12 months for the world.
“From a Cardiff perspective, I am incredibly proud of the team we have here who have adapted, remained focussed and worked tremendously hard to ensure that we remain at the core of many of the major schemes in South Wales. The industrial, logistics and residential sectors have performed particularly strongly and we are also witnessing a notable pivot towards the ESG agenda which is at the forefront of what occupiers and investors seek. We are seeing increasing demand for offices that can meet this criteria.”