Okay. I'll start if I may. Good morning, ladies and gentlemen, and welcome to this morning's presentation of Savills preliminary results for the 12 months ending 31st December 2021. While this presentation remains virtual, I'm determined that we will return to physical presentations in the future alongside continued virtual presentations for those that cannot attend. The timing of these results coincides more or less with the second anniversary of the start of the COVID pandemic. If one looks back over the last 24 months or so much has been achieved on the journey to ending the pandemic.
The strong performance of our business, which I will highlight today, is a fitting testament to the commitment of our outstanding global workforce, together with our strategy to maintain our bench strength and continue to invest in our business, for the future recovery as world markets reconnect. This reconnection I look forward to enjoying the familiarity of the return to normal in many things that we do, but also appreciating the changes and opportunities presented and the experiences we have gained. Against this backdrop, new and grave challenges have occurred, as evidenced by the humanitarian tragedy unfolding from the war in Ukraine, and I sincerely hope that the spirit of collaboration that we've seen across the world during the pandemic will end this crisis and the suffering it has brought. It is perhaps highlighting that Savills does not have any shareholding in a business in Russia.
Any work in the region that up to now has been done by a long-standing associate, with this agreement, suspended. The formats of today's sessions remain consistent with previous years, which will include the highlights of our results, a summary of our regional operations, and then a detailed financial review of the segments of our business. Turning now to the highlights. I am delighted to announce that the group revenue has risen to over GBP 2.1 billion, a record ever level and representing a 23% increase year-on-year. This has resulted in group underlying profits increasing by 107% year-on-year to over GBP 200 million. Again, a record level.
Our continued policy of maintaining balance sheet strength has resulted in our net cash position increasing to over GBP 340 million, allowing us to maintain our strategy to invest in the business going forward. In light of this performance, we are declaring an aggregated dividend distribution of GBP 0.614 per share, reflecting the group's very strong recovery and cash generation since the lockdowns of 2020. This includes a special dividend of GBP 0.2705, similar to the proposed 2019 final distribution, which was canceled for obvious reasons in March 2020. The drivers of this substantially improved performance have been a recovery in our global transaction advisory revenues, increasing by over 34% and representing a 400% increase in underlying profits year-over-year.
Of particular note has been the recovery of the U.K. commercial and residential transaction businesses, going well beyond their pre-pandemic levels, with annual revenue growth of 44% and 38% respectively. Equally, across the Asia Pacific region, transaction revenues significantly increased across the major markets driven by Hong Kong, Australia, Singapore and Japan. Within both Continental Europe and the Middle East, as well as North America, our business has experienced a very positive swing as transaction revenues recovered, allowing us to negate previous year loss, year's losses and provide a positive return to overall group profits. The balance of our significant consultancy, property and facilities management businesses, combined with our investment management platform, delivered increased revenues of 17% and improved profit levels globally.
These results reflect our strategy to continue to invest in our business, recruiting the best people, enabling them with enabled technology, as well as evolving the business to provide greater focus and innovation across the spectrum of ESG. Now, turning to Savills diversified model, a slide you've seen before. Our continued strategy to invest in key markets where our clients require services has remained throughout the pandemic, and this will accelerate as markets continue to unlock. The benefits of this broad geographic spread have been well evidenced during the successive waves of the pandemic. We've seen a faster emergence and unlocking of markets in the U.K. and North America, primarily due to the vaccination programs allowing government policies to relax earlier, improving the transactional volumes. Across continental Europe and the Middle East, market improvements were delayed into the second half of last year, particularly the last quarter.
While across Asia Pacific, many markets still continue to experience operational restrictions, although significant relaxations have occurred in Singapore and Australia. If we look in more detail at the composition of our business lines, you'll see that we've maintained a strong balance between transactional and less transactional businesses with our property management portfolio increasing to over 2.45 billion sq ft. Property Management represents our largest single business line worldwide. As you'll then see from the individual pie charts here, the regional balance of our business has also been maintained, with a significant increase in the less transactional segment of our income in North America due to the accelerated growth in our consultancy service. The proportion of revenue derived from transactions, not surprisingly, increased year-on-year as the markets recovered. However, the weightings remain in proportion to our ten-year revenue growth.
I'll show you this on the next slide. As you can see, this clearly illustrates our continued growth since 2012, averaging over 11% per annum during the period, which, ignoring the effects of the pandemic during 2020, remains consistent. Equally, the growth is balanced between the transactional and less transactional growth income streams as we continue to diversify the platform. It is also worth reiterating that circa 70% of our revenue growth during this period has come from organic growth as opposed to corporate acquisitions. Turning now to the macro picture and its effect on the real estate markets. I think this is important to provide a context for the direct investment we've been undertaking, providing a summary of the main influences perhaps affecting the real estate markets.
On a macro basis, concerns for public health have given way to rising concerns for inflationary pressures, particularly energy, as well as the much greater geopolitical tensions around the world. However, real estate is often regarded as a safe haven by investors. While meds, beds and sheds, as you'll see, remain high on the shopping list, strong asset prices are now forcing investors to look at other sectors as they search for value. The impact of flexible working and work from home policies has affected the rate of recovery of office leasing volumes, but investment interest has recovered, particularly for office assets with greater sustainability credentials. This has also fed into retail following a recalibration of rental levels as [rural] returns no doubt will see the same in hotels and hospitality. Finally, residential, where we've seen the strongest demand recovery worldwide.
This has created localized shortages of stock in some markets, as well as significant price increases, which are likely to renormalize in the medium term. Moving on to new and enhanced service lines that we've created. I mean, there remains much commentary on the lasting effects of the pandemic on the real estate markets, and one thing is for certain, we at Savills will continue to evolve and invest in enhanced services. Our brand is synonymous with high-quality advice in the residential sector, and we will continue to develop our global platform in the identified markets. We also continue to invest in property and asset management. You've seen us extend our platforms recently in Spain and Germany, and this will continue as landlords have to take a more active role in providing better quality services to their occupier base.
The redesign of the workplace, the competition for talent, as well as the need to improve efficiency and sustainability is an enormous challenge and opportunity as many buildings will need repositioning. This allows both Savills Earth and Savills Flex, our environmental and flexible space consultancy businesses, to expand to meet this demand. We also have significant geographic growth opportunities. In most cases, these are already advanced, but that will continue. In fact, since preparing this presentation, we have just acquired a new full-service business in Indonesia. In mentioning Savills Earth earlier, I think it's important that I give you a brief insight into our services in this critical area. Within Savills Earth, we have developed a comprehensive environmental consultancy service designed to assist our clients as they develop their own plans on their journey to net zero.
While Savills Earth is headquartered in London, we have teams globally, and the demand for these services continues to accelerate, particularly in more developed markets. Our holistic approach allows us to provide sustainable strategies, to provide in-depth advice on all renewable energy sources and grid consultancy, as well as the maximization of sustainable materials and supply chain, and the minimization of waste. Moving into the built environment, Savills Earth can assist both owners and occupiers in repositioning these assets to meet the improved standards required, particularly through refurbishment and refitting. Of course, this links with our project management services. An example of this growth and evolution is our energy team, which is based in Cardiff, and this has now grown to over 55 consultants sourcing green energy for our clients within our property management sphere, and where 95% of our clients now use green energy.
Thanks also to our expertise across land and natural capital and biodiversity, we can also provide advice on environmental economics, natural capital accounting, as well as social value impacts. In all, a comprehensive menu of services which adds to it. We add to this all the time. Now, moving on to the individual markets. In the U.K., I've split activity between the commercial and residential sectors. Starting with commercial. During the year, we saw continued improvements in investment volumes due to pent-up demand, with volumes actually reaching the highest level since 2017.
Domestic activity was in line with the long-term average at just over 46% of total, with the main cross-border demand coming from American and Pan-European investors. Despite all the rhetoric around work from home, national office take up increased by 35% year-on-year, still below the 10-year average by 5%, but improving. Demand was polarized to better quality Grade A stock, reflecting its green premium, while secondary offices experienced rental declines of around 9%, potentially linked to a brown discount. In anticipation of this improved activity, we strengthened our central London investment and leasing teams with new leadership, and this allowed our investment teams to transact on some of the largest deals in 2021, including Union Investment's acquisition of the British Telecom headquarters, as well as acting for Generali on Times Square.
These, together with many other notable transactions, allowed us to increase our investment share in London to over 28%. Nationally, our teams also advised Blackstone on their circa GBP 1.3 billion acquisition of St. Modwen. Thanks to the strength and depth of our retail teams, we took advantage of the market recovery, trading 32 retail warehouse parks and allowing us to claim top spot in terms of market share. Our leasing teams were also appointed by British Land at Canada Water, which will become London's first net zero neighborhood, delivering 3,000 new homes and 3 million sq ft of commercial space. Outside London, we continue to expand our life science and agency platforms, where we were appointed on Oxford North, which will deliver over 1 million sq ft. Now, turning to residential.
Well, we continued to experience significant market momentum nationally, particularly for houses outside London, where transactions over GBP 1 million were up 83% on 2019 levels. This resulted in strong house price growth, the highest in the East of England, Wales and Scotland. While demand continued to recover across central London, particularly on houses. This activity has resulted in reduced stock levels. As we start this year, U.K. national stock levels are actually 19% lower than a year ago and 30% lower outside London. We do anticipate the availability levels will improve during the second half of the year. In light of the ongoing activity, we continued to invest in our platform, growing our network to over 98 offices and increasing our staff numbers by 7% during the year.
Our own sales volumes increased 45% year-on-year in the country and up 41% in London, resulting in our market share increasing in London sales over GBP 5 million to almost 28%, as well as maintaining a commanding 17.4% share in prime country property. During the year, we transacted on the highest single value residence at over GBP 100 million, while our new homes business in the regions increased their revenues by 27%. Alongside this, we also continued to grow our residential lettings platform, where revenues increased by 10%. Across the U.K. in entirety, thanks to our strong market share in both commercial and residential, we therefore increased our full-year revenue over 30% to GBP 925 million. Now, moving on to Asia Pacific.
Across the region, the economic bounce back was led by India, China and Singapore, but also improvements in Hong Kong. Similarly, the real estate recovery was strongest in Singapore and Australia, with Australia's commercial investment volumes doubling year on year. In the office sector, Grade A rents remained generally stable, but with declines focused in Hong Kong, which fell 5.4% during the year. Office investment volumes here also fell by 48%. Investor demand remains polarized across the region to the larger global centers, as well as a search for alternative assets. In Greater China, we focused our growth on Property Management and Facilities Management, winning a number of new mandates, and also developing a national industrial and logistics capability.
Across the rest of Asia Pac, we grew, and we strengthened our residential business, including the acquisition of RealPlus in Vietnam, as well as supporting the development of our co-owned Huttons business in Singapore with the acquisition of 1,000 new residential brokers. We also acquired Merx, an established project management platform operating across Southeast Asia and Hong Kong. Thanks to the strength and depth of our teams across the region, we increased our commercial investment market share to 61% in Hong Kong, and we also took number one market position in Singapore with over 32% market share. Transactional highlights include acting on landmark deals at One Bligh Street and 200 George Street in Sydney, and in Singapore, acting on the disposal of the Suntec City office portfolio, as well as advising Alibaba Lazada on its brand new logistics facility.
Across other parts of the region, we acted for Mercedes AG on its new logistics center in Malaysia, as well as Louis Vuitton on a new flagship store in Hanoi, Vietnam. Thanks to our continued investment, our revenues here grew 9% year-on-year to GBP 626.5 million, despite some of the headwinds that continue to affect the region. Turning now to North America. As many of you will be aware, our principal activity across North America is focused on tenant advisory work in the office and logistics sector. Both of these recovered well, with annual office take-up increasing 20% year-on-year, and Q4 actually achieving record volumes. Our own revenue growth of 27% in this sector shows the market gain we made during the period.
The strongest markets were notable, but not unsurprisingly, New York, L.A., and San Francisco, with recovery also in Chicago and Washington. While logistics, like many other markets, reached record levels. In line with our continued investment across the platform, we've strengthened our leadership team, including a new President, Chief Strategy Officer, Chief Diversity Officer, as we continue to push our growth forward. I mentioned in our interim results last year that the recently acquired T3 Advisors, a specialist consultancy in life science and tech, and we've integrated this business into our network, allowing us to expand our worldwide activities in this key sector. Balancing our strong transactional capability with further consultancy services is a key theme, and with the expansion of our project management and workplace consultancy teams, and this is set to continue.
This has resulted in the extension of our platform by a further five offices, including Edmonton, Kentucky, and we also have strengthened our operations in Detroit, Tampa, Boston, and expanded our tenant advisory team in New York. Finally, our market-leading Knowledge Cubed software has been rolled out across multiple mandate client accounts within our occupier services business. This resurgence in activity resulted in us acting for, with T3 for HubSpot, one of the largest leasing deals in Boston. Our teams also advised Kirkland & Ellis in Chicago on their new headquarters. In New York, we advised KIPP NYC to service its expanding student base in the Bronx. By capturing more market share in these key markets, our revenues grew 38% year-on-year, with our revenue totaling just under GBP 294 million. Next, Europe and the Middle East.
Well, here, successive waves of the pandemic meant that markets in Europe unlocked slightly behind the U.K., with recovery weighted to H2. Commercial investment volumes actually recovered, exceeding the five-year average by 4%, and the strongest gains were noted in the Nordics and Germany. Like most other markets, office leasing remained subdued and still well below the five-year average, with an improvement, though, in Q4. Moving on to our business development. We focused on the largest European economies, with a particular emphasis on logistics and residential. This is well illustrated in Germany, where we expanded both our logistics capability in Frankfurt and opened a brand-new residential business in Berlin. We also appointed a new head of national logistics in France and opened four new residential offices covering the French Riviera as well as the Alps.
In Spain, where we enjoyed a strong market share of over 19% in the commercial investment transactions, we acquired a new shopping center property management business, and now have one of the most comprehensive businesses in the region. We also invested in Italian logistics, and across the Middle East, the rapid growth of our Egyptian and Saudi Arabian business continues, with over 50 new hires in Egypt alone. The benefits of this continued growth led to our worldwide occupier services team being appointed by Electronic Arts to advise on both their EMEA and Asia Pacific office portfolios, while in capital markets, we also advised on some of the largest European transactions, including the sale by Macquarie and Elite of a Pan-European logistics portfolio for over EUR 500 million .
Our European property management platform also continues to win greater market share, and in Ireland, we were appointed by Irish Life to manage their entire portfolio, covering 45 buildings. The continued growth resulted in our staff numbers here increasing by 250 employees, and the strong turnaround we experienced allowed us to grow our revenues to just over GBP 301 million, representing revenue growth of 25% year-over-year. Savills Investment Management. Well, with record levels of dry powder in the market, this, not surprisingly, pushed asset prices to new highs, particularly in logistics and residential. Demand obviously for prime offices remains strong, and we're starting to see greater liquidity on Pan-European logistics as some investors take profits.
Within our business, thanks to a very active year, both our revenue and profits achieve record levels linked to higher performance fees, new fund launches, as well as the benefit of the acquisition of the remaining shareholding in DRC Capital, our specialist debt investment management platform. Despite the effects of the pandemic, we managed to raise just under EUR 3 billion of new equity, both for real estate equity and debt products. Other highlights include new fund launches in the U.K., such as the Value Boxes Fund, that's specializing in retail warehousing, as well as several new Italian funds in Europe. Base management fees also increased year-on-year by 30%.
With the successful integration of DRC, this has also allowed us to grow into Asia with a new Australian team, and we're considering new opportunities in other markets. Finally, and most significant, we entered into our strategic alliance with Samsung Life Insurance at the year-end, and this will lead to substantial capital allocations for our fund programs from H2 onwards this year. It's also important to highlight that our fund performance continues to remain ahead of target, with over 76% of our capital deployed outperforming its five-year benchmark. On income related products, over 81% have performed above their five-year benchmark, indicating the quality of our platform. This outstanding performance has allowed revenues to grow by some 58% year-on-year to GBP 111.8 million. I will next move on to Savills Group net zero targets and our own commitments.
Last year, I highlighted the Savills strategic commitment to align to nine UN Sustainable Development Goals with particular emphasis on climate action, clean energy, and sustainable cities. In light of these commitments, I'm now able to update you on the net zero targets that we have adopted. The group has adopted science-based carbon reduction targets, with the commitment to achieve net zero across the entire office network within Scope 1 and 2 by 2030. We've also committed to net zero across our controlled value chain, Scope 3, by 2040. We will also collect and report Scope 3 data in relation to properties which we manage on behalf of clients, and we will continue. But these are areas we do not have direct discretionary control.
Through these commitments, we're joining the Race to Zero and Business Ambition for 1.5 degrees C, and we'll build upon the reductions that we have already made, namely a 30% reduction on Scope 1 and 2 by 2018, and a further 20% reduction between 2019 and 2021. Turning now to our social commitments. At Savills, our people are our assets, and we continue to invest in them, namely developing talent, promoting diversity and inclusion, as well as enhancing social impact through education and health and wellbeing. Within our D&I program, we've added to our worldwide programs in support of these commitments. In the U.K., this has included our graduates and apprenticeship schemes, partnering with many schools in deprived areas, promoting careers in real estate.
We now employ circa 117 apprentices and over 220 graduates in our U.K. business. In North America, our junior broker program has had a 90% diverse class for the last two years, and all candidates who have completed the course have been given full-time positions in our national business. Across the APAC region, we've introduced a staff wellness initiative supporting mental and physical health, as well as Savills Academies, which fast-tracks education and training, leading to direct employment in our business. While we've made considerable progress across D&I, we know that a lot more is needed within the real estate industry, and we will continue to push forward changes to our business to achieve this.
As a business listed in the U.K., we are both Hampton-Alexander Review and Parker Review compliant, and we rank 46 in the FTSE 250 on women in senior positions. We also continue to support many charities worldwide, both through considerable voluntary work as well as financial support where it's desperately needed. This is evidenced recently by the war in Ukraine, where both at group level as well as locally through our Polish business, we've made, and will continue to make, significant contributions to provide the urgently needed humanitarian aid, as well as a number of our staff becoming directly involved in the relief efforts. I will now hand you over to Simon, who will take you through the numbers.
Thank you, Mark, and good morning, everybody. This is really a fantastic recovery from the pandemic. As you heard, it's due in no small part to our strategy of retaining our bench strength and really out-servicing clients during the dark days of 2020. There's also no doubt a degree to which we have benefited from non-recurring profitability during the period, particularly in the areas of discretionary expenditure, and as you heard, a super normal U.K., particularly, residential market. Perhaps the most germane comparison really is not with 2020, because everybody should be performing well in that comparison, but with 2019. You can see here that the underlying performance is very encouraging. With double-digit revenue growth and significant operating leverage driving an enhanced margin and earnings.
I would say to my point about the non-recurring element, the margin is clearly flattered by supernormal profitability, which is progressively going to normalize over 2022. I guide you to the impact of that being somewhere between 100 and 130 basis points of margin. Clearly, the dividend proposal is substantially up year-on-year. Bear in mind that in March 2020, we canceled the 2019 final dividend for obvious reasons. Let's turn to the components of that shareholder distribution. This slide shows the reinstatement of our normal distribution policy, which resulted in an ordinary dividend of GBP 0.1875 for the year. Supported by our less transactional businesses, of which GBP 0.6 was paid at the interim.
Alongside this, and based on the strong transactional result that you've seen, we're declaring a supplementary or transactional interim dividend of GBP 0.156. Collectively, these two amount to GBP 0.3435, which compares with an original 2019 declaration of GBP 0.32. Up about 7% or so on an underlying basis. In addition to this, and reflecting the strong net cash position and the outperformance that I've talked about, we're declaring a one-time special dividend of GBP 0.2705, which is similar to the final dividends kindly foregone by shareholders as they supported us during the early days of COVID.
Let's turn now to performance of our business segments, and I apologize that this is quite a busy slide, but I do think it's important for your analysis purposes that you have not just the 2020 comparative, but a 2019 comparison as well, and that's in the light blue on these slides. The outstanding performance here is obviously the U.K., which has significantly eclipsed both 2019 and 2020 with highly attractive growth characteristics. Although I should caution you that the majority of the extraordinary or non-recurring performance I've mentioned really sits here in this market in the U.K., as does the surge in residential transactions we've covered already. In Asia, we saw a return to pre-COVID levels and profits step up significantly.
Elsewhere, in North America and Continental Europe and the Middle East, you can see the broad return to 2019 levels of performance, and that was particularly driven through the last half and particularly last quarter of the year. Let's turn now to our service lines. The good news here is that, there's growth in revenue and profits across the board of our service lines, which is clearly evident from this chart. I would draw your attention to the operating leverage in the transactional business through the recovery. It's clear to see that with GBP 226 million of incremental revenue between 2021 and 2020, that flowed through to the pre-tax line at a 35% incremental margin. This is a segment which traditionally carries most of the discretionary cost spend I've mentioned, and therefore you should expect that to temper somewhat in the coming period.
The less transactional businesses performed very well in aggregate, with 17% revenue growth and 33% profit growth over 2020, and not dissimilar numbers over 2019. Consultancy, in particular, has benefited from the acquisition of T3 in the U.S. and additional work advising on return to work and fit-out strategies as well as sustainability as lockdowns eased around the world. Investment Management too performed very strongly, as you've heard, and benefited from seven months of the full acquisition of DRC Capital, and I'll enumerate that in a moment. Let's turn now to our cash flows.
Here you can see the continued growth in cash flow performance from operating activities driven largely by the profit growth, but also the expected level of working capital improvement, which at GBP 50 million was half the rate that we registered last year in 2020 and entirely consistent with our expectations. Spend on acquisitions grew, as did CapEx, and the employee share scheme purchases grew significantly by about GBP 40 million as we increased the hedging level in our employee benefit trusts, which obviously support the longer-term share-based incentive schemes for staff around the world. The larger yellow positive flow in the middle of this bridge is the proceeds from the Samsung transaction, which completed on 31st of December. In summary, it was a strong year for cash generation and supports the higher shareholder distribution for 2021.
You should expect our cash position to normalize further during 2022, partly through the normalization of trading, but also as a result of business development and the increased dividend payout for 2021. We now go to the regional and business segments. Starting with the commercial transaction business, in aggregate, our businesses recovered to 2019 levels globally, and this is led, as you heard, by capital markets activity, with leasing progressively recovering during the year, but not universally reaching pre-pandemic levels by year-end. Asia and the U.K. posted significant income growth over 2020 and 2019, and it was particularly gratifying to see some of the 2019 investment in our capital markets teams, particularly in Singapore and Australia, come to fruition strongly during this period. In North America and Continental Europe and the Middle East, recovery, as we've heard, is more protracted.
There's greater exposure to leasing in those markets for us, but it was ahead of our expectations. As we shift now to residential, clearly the U.K. had an outstanding performance versus all comparatives as the sort of supernormal year of post-pandemic search for space continued. Markets outside London, as you heard, led that charge, but we did see a significant pickup in prime central London activity during the second half, particularly fourth quarter of the year. In Asia, we saw a decline in transactional activity in Hong Kong for a variety of very well rehearsed reasons you'll understand. Mainland China and Australia performed well. At the profit line, we benefited from improved contribution from our 40% holding in the Huttons joint venture in Singapore. We now go to Property Management.
In Asia, the numbers don't quite tell the story, as we saw a material reduction in COVID-19 employment subsidies, particularly in Facilities Management in Hong Kong. The sort of tapered lag effect of this into 2021 ensured that the business continued to deliver a margin of over 7%, which is higher than our normalized expectation of around 5.5%-6%. In the U.K., we had a very strong year, boosted by both recent and in-year contract wins, and a very strong lettings performance in the residential management service line. In Continental Europe and the Middle East, we benefited from the full year effect of the previous year's acquisition of OMEGA in Germany, and together with core growth across the region to improve the profit performance year-on-year.
If we turn to Consultancy, this is another great year for our consultancy business worldwide with strong aggregate revenue and profit growth versus both 2020 and 2019. In the U.K., which is obviously our broadest portfolio of offerings in this segment, we benefited from recovery across the board together with increased activity in workplace and ESG consulting, alongside all aspects of planning, development, and project management. In Asia, valuation growth was somewhat offset by pandemic-related delays in project management, particularly in Australia, where as you're aware, lockdown restrictions continued for a very long period of time, that really have only just started to release. In Continental Europe, general consultancy growth was offset at the profit line by fewer due diligence assignments, particularly in Germany.
Finally, in North America, we saw the benefits of our project management acquisition in the prior year in 2020 as Macro , and the technology practice T3 mid-year to post a maiden profit in this segment. Finally, if we turn to Savills Investment Management, we obviously, as you've heard, had a material increase in both revenue and profit versus both comparative periods. You should note that the reclassification of fundraise costs, which had previously been netted from revenue and is now grossed up in revenue and cost, affected and flattered, frankly, the revenue line. Absent this, revenue underlying grew at 34% on a like-for-like basis. Clearly, that adjustment has absolutely no effect on profitability or profit, I should say. SIM's performance was driven by strong fund performance in both equity and debt, and we were delighted to accelerate the acquisition of the remaining 75% of DRC Capital.
This contributed an acquisition-related profit of GBP 5 million during the year, alongside its very strong underlying performance. While a cautious approach to capital deployment during the pandemic limited the year-on-year increase in transaction fees to 12%, we did have a supernormal year for performance fees, which were up over 90% year-on-year. Set against this, though, we have executed a significant amount of recruitment in preparation for the deployment of Samsung Life funds into both recently launched and new fund launches. We expect this deployment to commence in H2 once various product-level regulatory approvals have been obtained. In summary, it was a very strong year for Savills Investment Management, and you should note that from this year onwards, we will see growth in the minority interest in fund management profits, reflecting Savills now 25% stake in the business.
With that, I'll hand you back to Mark.
Thanks, Simon. Key priorities. Well, despite the greater risks and uncertainty now evident, our priorities and overall strategy remains consistent with the approach we adopted during the pandemic. Namely, this was to hold our nerve, hold our course, but maintain bench strength as we look forward to a more certain future and a recovery in the real estate markets we operate within. In transaction, in particular, we continue to accelerate our growth across many global markets focused on residential capital markets and also occupier services. Within Property Management, our largest service line, we will continue to develop our services, particularly across the U.K., Continental Europe and the Middle East, and the APAC regions, while adding more services as those needed by our landlord clients. Within Consultancy, we've already highlighted Savills Earth and growth here.
This will link with our project management capability globally so that we can enact on-the-ground sustainable solutions. Savills Investment Management, our focus will remain on key markets across Europe and the Asia Pac region, creating scale in our equity and debt products, together with the development and launch of the new funds Simon mentioned, including residential and selective retail markets. While we continue to invest for the future, we are focused on tight financial control, which has obviously served us so well during the pandemic and allowed us to strengthen our balance sheet. Moving on to summary and outlook. I am delighted by the record performances the business has achieved, driven to a large degree by the recovery in the commercial and residential transaction markets. This recovery, though, is supported by the balance of our business, with continued growth in our less transactional businesses, with further growth to come.
The recovery in transactional markets has resulted in some localized stock shortages, affecting both the prime residential and commercial markets, which may limit transaction volumes in the near term despite the continued allocations for property as a safe haven asset. World markets have obviously experienced much greater geopolitical and inflationary risks, and the effects of these are hard to predict going forward. However, we have started the year in line with our expectations and do remain confident on our outlook. Finally, and most importantly, several thank yous. Firstly, to our tremendous workforce and the fantastic efforts they made throughout the year. It's a great privilege for me to be their CEO. Secondly, I would like to take the opportunity to thank all our loyal clients who partner with Savills teams globally, as well as the continued commitment of all our shareholders. Thank you for attending today's webinar.
Simon and I will now be very happy to take any questions you have. Thank you.
Excuse me, while we read the first question, and this is from Joe Spooner. What quantum of discretionary costs need to feed back into the business and what profile should we expect for that? In less transactional units, U.K. consulting was notably strong. Is the 2021 performance sustainable level to build from? And what is the experience to date with Samsung Life Alliance, Savills Investment Management, and what milestones are there for us in 2022 and beyond? There are really three questions in that. Perhaps I'll start with the first one, move to Mark for the second-
Yeah.
Then I'll take the third. In terms of quantum discretionary costs. This is a bit of an art rather than a science, to be completely candid. If you look to the captions of travel and entertaining, major marketing events, etc., you see something in the region of about GBP 19 million pre-tax benefit effect in 2021 compared with 2019. Obviously, we've got our superior trading in residential on top of that as well. The rate of return of those costs is very difficult to predict because it does also depend around the world on where markets are unlocked, etc. Obviously, you'll be aware that in Greater China, we're still suffering significant restrictions in those markets. I suspect we will see a gradual return through 2022.
The key question is, to what level of percentage of pre-COVID levels will we see that return? At the moment, my estimate is something around 70%-75% of that order. I should actually say that my GBP 19 million is assuming the difference between 2021 and 75% of 2019. In true numeric terms, that gives you the number, and the rate of return is the question. I suspect that would be progressively over 2022. Mark, do you want to talk about U.K. Consultancy?
Well, it is to start with, it is the strongest consultancy base. We have the largest portfolio of services we have are based in the U.K. in Consultancy. It covers a very wide spectrum. The mentioning of Savills Earth as part of that portfolio, you can see why things are growing significantly. I suppose to answer the question straight away, I would say that it is sustainable, but of course, the profit increase that we had was significant last year, and that's because we had clients sitting, maybe not doing as much, whether it be in planning, whether it be in project management, you know, delaying things. Of course, we saw an uplift, significant uplift, thanks to that sort of pent-up demand, if you like.
The portfolio as a whole is continuing to strengthen, as we add more services within Consultancy, and these connect with our services in other international markets. Yeah, I do see it sustainable, and it will continue to grow going forward. I think the uplift of profitability was significant, because of that.
Yeah. I'll add that I think the word sustainable is incredibly apt to make that answer, given the activities within Savills Earth and the growth of that which occurs within the consulting business and property management as well. I think that's a solid base from which to build. The final part of Joe's question was what was the experience to date with Samsung Life Alliance investment management business and what are the milestones for 2022 and beyond?
I'd say it is very early days. Obviously, we completed the deal on 31st of December, and we've had the first round of quarterly board meetings, et cetera, with Samsung personnel participating. I'd say it's a very strong relationship and actually growing stronger now that the transaction has been executed.
as I said, it's early days. As I said earlier in my piece, we are awaiting product-level regulatory approval.
Potentially from the Korean regulator, which is what enables Samsung to make their investment through these funds, which we're expecting to come through over the next couple of months or so for the first product. Which does mean that the commitment, and to remind you, the firm commitment from Samsung is $1 billion of seed capital type investment over the first five years of the relationship. There is opportunity, obviously, for them to go over and above that. I suspect we'll see a reasonable commitment in the second half of 2022, and then the only question is the rate at which we are able to deploy that capital as opposed to it being committed, together with a build-up in 2023, in terms of the basic commitments.
I think that's a core milestone for me over the next two years. Of course, then the relationship is permissive of future growth together as well thereafter.
I think unless anybody else has any questions, that has covered what you want to know. We do have a new one coming in.
Yeah.
This is from Sam Cullen. You mentioned you thought residential stock levels would increase this year. Why do you think that is, other than mean reversion? Are you seeing increased competition for staff as markets recover? Can you comment on the M&A pipeline by region and business type? Are you at all exposed to the cladding fire safety issues here in the U.K.? We've got a bit of a mixture of macro and micro there.
Okay.
Shall I start with the residential stock levels? The demand, Sam, is being maintained. You know, we're seeing actually applicants for properties, one of our key demand measures, actually increasing. Demand hasn't gone away. We do start the year with reduced national stock levels, but then the national stock levels are back 19% nationally, as I mentioned, and 30% outside London. We can't buck that. But I think what we are gonna see is that catalyst. We've seen significant price increases, and we are gonna see more stock coming through, and we're certainly pitching on more stock as we speak. Naturally, that demand drives supply over a period of time.
I do think it will improve, but what I would say, though, there is that we've already said in the past that we expect market levels to normalize during this year. We still have that view. It doesn't mean they will reduce it just means that they will not have the super normal trading that they had in maybe last year and parts of the year before. That is, I think, what we will see. It will be driven, and we do expect stock levels to improve in the second half of this year. Second one, are you seeing increased competition for staff as market recovers? Yes. Look, in truth, we always have competition for good staff 'cause we employ good staff, high quality people, they always have opportunities.
We are seeing significant inflationary salary pressures in many markets, so I might pass that to Simon. One thing I would say on that, though, is because, you know, our strategy of maintaining bench strength, looking after our people through thick and thin, you know, that has created, you know, a great deal of longevity and loyalty within the business, and the culture of the business does allow us to look after them, as I say, and make them feel part of a family. I do feel it doesn't stop them. We've got to pay them properly. But it's important that that aspect is made clear.
Yeah.
Simon, in terms of the.
Yeah. Obviously we're seeing particularly salary inflation for the first time of any significance in my 13 years here. That's reflected in a salary bill that probably averages around 6% growth globally for 2022. Although do bear in mind, that's off the back of nothing much in 2020 for 2021. It's not in any way outrageous. I would add the point around competition, because we maintained our bench strength, unlike many of our peers in this market, we are not seeking to fill gaps in the recovery. What we're doing is recruiting for growth, and that is a much better position to be in markets like this.
The next question was, can you comment on the M&A pipeline? Obviously the answer, the direct answer to the question is no. But I think Mark will give a thematic area.
Yeah.
I mean, I think you've seen, as Simon says, if you look back at what we've been doing, we've been building our property management platform through acquisition. We've also been building our project management capabilities. You know, Merx being an example of that, you know, just before year end. What you'll see us continuing to develop that across APAC and across EMEA, and that will continue, as well as growth of our consultancy services in North America. I feel that if I give you some views, I would say that still, as we have shown in the past, a lot of it, this is organic growth. Where we do acquire businesses, it's where you need a platform. You can't just do it organically.
You've got to actually create something to develop further. They're more likely to be strategic bolt-ons than great M&A road warrior stuff. We will look at sort of smaller but more frequent acquisitions in the regions that we feel we need and adding services to it. I think that will still be the tendency, so I'd expect, you know, us to perhaps be slightly more active in the coming year or two because there are more opportunities presenting themselves. We will look in North America. We will look to continue to grow across the European markets and also develop the Asia Pac region. I think I mentioned, you know, we've already just acquired something in Indonesia, not yet formally announced.
You'll see us continuing to develop growth markets because of our strength of our brand there. The final one I would just say is residential, global residential. You know, we are pushing forward on that. You know, the fact that we've had such good demand-led recovery and also, you know, our brand is strong in it, and we have very good operators within that region, that sector, that's something we'll continue to promote as well.
The final one is.
The final one is exposed to cladding fire safety issues seen in the U.K. I think the short answer to this is we advise on these matters, and we're obviously advising on restitution activity, but we don't have direct liability. If we can move on, we've got another question which is, what should be the pace of normalization in U.K. residential PBT, and how are activity levels at the moment? I think we've probably answered the activity levels point, with strong applicants, but less stock available, which clearly has an impact on activity. I won't answer, for obvious reasons, the direct question around PBT residential.
I would say that in our pure second-hand residential business, we're probably looking at something around 15%-20% reduction in activity in the market in 2022 versus a supernormal level of transactions in 2021. I think we'll be probably pretty consistent with that. That's for that part of our residential business.
The last one, from Jane Carter. Congratulations on the numbers. Thank you very much. Can you give us any color on how sanctions on Russia may impact the business?
Okay. Well, look, I mean, I think I've covered the fact that, you know, the Russian influence in residential is actually quite small. You know, in, and this is national, not Savills, but nationally. It's very small outside of London. Less than 0.3% of residential transactions would go to Russian nationals. In London, I think it was central London, it was 1.4%. This has been a diminished area of activity, significantly diminished. I don't think it's gonna have any major impact on the market per se. Much more important to actually domestic buyers, North American buyers, Asia Pacific region buyers. You know, it is very small. Commercially virtually non-existent.
What I would say, though, is the effect on the economy, not necessarily the sanctions. It's more about the impact on potentially the world economy. Russia's GDP, as we know, is not very significant in the relative world order merit. However, you know, concern around that activity and what's going on is significant and obviously can affect maybe, you know, Central and Eastern Europe. Decisions being made in some of those markets may get delayed. I don't think it's a direct level of sanctions. You know, I would say for real estate, we probably will see more money being allocated to real estate investment simply because of some of the turbulence on some of the equity markets. I think it's interesting to see how it will play out.
Obviously, we're very concerned about it and taking it. You know, obviously, we hope that it'll end soon.
I might add something to that, if I may, Jane. I think this is the Russian sanctions, AML, KYC stuff. You should be aware that particularly the top-end agents are highly regulated and have been for quite a long period of time in terms of compliance, and HMRC is actually our regulator for these purposes. We've got an enormous compliance team that is checking not just at the beginning of any transaction, but all the way through the sanctions status, the AML status, et cetera, of all of our clients, not just Russians. We're very comfortable with the impact here in Savills.
Just scroll down so it's-
I think that is it for questions, unless anybody wants a final go. With that, Mark?
Well, can I thank you all for attending. As I say, I look forward to seeing you at our interims, hopefully in person. Thanks for all your support and any other further questions, please fire them through to Simon and I separately via email. Thank you.