Good morning, ladies and gentlemen, and welcome to our presentation of Savills' Interim Results For The Six Months Ending 30th June 2025. This will be the last time that I update the market on our results as I am retiring as CEO of the group at the end of this year after almost 30 years at Savills. Needless to say, I am absolutely delighted that Simon, on my right, will take on this role on the 1st of January 2026. He and I have worked together very closely over the last 17 years, during a critical phase of the growth of Savills, as well as direct partners as CEO and CFO for the last seven. Sticking with the theme around the number seven, it's also this year exactly 170 years since Savills first started, a heritage and culture that all of us at Savills are very proud of.
We will ensure that the culture and core values and commitment to serving clients will continue going forward. This legacy of stability and resilience remains critical in a world experiencing even greater unpredictability, both on a macroeconomic level, following events such as Liberation Day and others, as well as the increasing global security tensions rashed together across many regions. Whilst the market recalibration that we mentioned in our early results this year, in many cases more or less completed, i.e., pricing has stabilized across many of the real estate markets. The improved investor and occupier confidence experienced at the end of last year and the beginning of this ebbed somewhat during Q2, particularly in capital markets, due to the heightened volatility, albeit this is now translating into much improved transactional pipelines, which we anticipate unlocking during the second half of this year.
We therefore remain on track to deliver against our expectations for the full year, thanks to the breadth and also the depth of our global business. Turning on to the highlights. I am pleased to announce that the group concluded the first- half of the year with an improved performance, taking into account that uncertainty I mentioned, particularly during Q2. The strong balance within our business allowed us to increase group revenue by almost 6.1%, 8% in constant currency to £1.128 billion, resulting in an underlying profit of £23.3 million, up just under 10% year- on- year. The drivers of this performance were an improvement in many of the global transaction markets, with overall transactional revenue up 2%, with a strong rebound in EMEA, with commercial transaction revenues here up 19%, offsetting temporary reductions in activity across.
In addition, our residential transaction revenue also experienced growth of 12% per annum during the period, driven by activity across the European and Middle Eastern markets, where we've been continuing to invest. The resilient revenue contributed by our less transactional business also continues to grow, now representing 67% in aggregate of our group revenue, with revenues up 8% year- on- year. Breaking this down further, our property and facilities management business grew by 5% during the period, whilst consultancy continued to experience strong demand, with revenues up 20%. Finally, as anticipated, we did see a modest decrease in revenue, 6%, from Savills Investment Management, reflecting lower management and performance fees during the period, in line with the prevailing market conditions, but stable assets under management.
In light of the continued strong performance, particularly of our less transactional businesses, as well as the outlook for the rest of the year, we've increased our interim dividend to £0.074 per share. Turning now briefly to examine the factors affecting the main transactional markets in which we operate. Focusing on capital markets activity, some of the strong momentum we experienced during the last quarter of 2024 and into 2025 dissipated across a number of markets in Q2, particularly those affected by economic uncertainty of trade tariffs, as well as a slower than anticipated reduction in interest rates. Global investment volumes improving off Q4, despite that improvement, market activity in H1 could be best described as only treading water, achieving only the same total volumes as the prior year.
An increase was experienced across North America of 10%, but other markets experienced falls, with EMEA down 7% and APAC down 13%. Just drawing out the U.K., volumes here fell 13% year- on- year. Capital raising for real estate also remained challenging, with a significant amount of equity tied up in legacy funds reducing liquidity. Therefore, market conditions remained difficult for disposing of larger lot sizes, with greater demand and activity polarized towards smaller lot sizes, attracting private investor activity. Sectors experiencing the strongest demand continue to include beds and sheds or living and logistics, while overall sentiment for the office sector is continuing to improve, with appetite moving beyond prime. The U.K. office sector in particular saw a bounce back, with volumes traded up 26% year- on- year. Okay, onto the leasing markets.
With a lack of secular development starts, leasing momentum and occupier commitment is continuing, with limited prime stock now available in a number of markets, hence pre-lettings becoming more prevalent as a market feature. Office leasing transactions continued their recovery in North America and also the U.K., as well as a modest increase across major European centers, particularly Germany, which experienced 18%, but off a lower prior year comparable. North American activity was led by markets including New York, Florida, and Texas, while there remained a sluggishness in Washington, D.C., with government activity diminished. With a dwindling supply equation, we are now seeing strong rental growth in a number of core markets, including central London, the major Western European cities, as well as selective APAC markets such as India, Australia, and Japan.
In March, I highlighted a normalization of demand occurring across the industrial and logistics sector, and while this resulted in a fall in overall takeup across EMEA, prime stock is still experiencing strong demand and therefore rental growth. Inevitably, retail markets have been affected by the imposition of trading tariffs across a number of markets, but prime retail remains resilient, with rental growth here still occurring, especially in many superprime locations. Onto residential. Within U.K. mainstream, we experienced a surge in activity during Q1, driven by the end of the stamp duty holiday at the end of March. The overall result was an increase in agreed sales of 4% per annum, but with fairly limited annual price growth of only 2.1%. Despite government reforms to planning in efforts to drive greater availability of new homes, house builder activity remains subdued, with new completions down 10% year- on- year.
Within U.K. prime, prices during the period actually fell by 2.2% in prime central London and 2.1% in the prime regional markets. A combination of factors is continuing to affect this, with prime central London affected by both earlier changes to the non-dom status, as well as perhaps a nervousness of prospective changes to the U.K. tax environment, whilst prime regional markets are perhaps adjusting more to the rapid price increase that they experienced during and immediately after the pandemic. It's also perhaps worth noting that prices in prime central London are now some 22.4% below their 2014 peak value, which is also starting to generate greater interest.
The market for sales over £1 million held up pretty well, increasing by 3% during the period, with good demand-led activity for houses, whilst the continued reduction in availability in a number of rental markets, in particular London, led to prime London rents increasing by 1.5% in H1. Onto the international markets, there is a broad resilience with strong pricing growth experienced in a number of markets, including Berlin, Dubai, Sydney, and Tokyo. In addition, market activity is also starting to pick up in Hong Kong, particularly in prime, whilst mainland China experienced a 13% increase in sales volumes in tier one cities. Globally, we are seeing the greatest demand for locations which provide a combination of lifestyle appeal, as well as security and tax benefits, as international buyers remain extremely mobile. Markets like that include Lisbon, Milan, Dubai, and Australia, and they are clearly the beneficiaries of some of this activity. Okay, I will now hand over to Simon, who will take you through our financial section.
Thank you very much, Mark. Good morning, everybody. You'll have pretty much picked up by now that the first- half of 2025 was itself a game of two quarters, Q1 being a continuation of the clear recovery of Q4 last year, with the expectation at that point of multiple interest rate cuts to come, etc. Q2 came with the tariff threat affecting property markets, particularly in EMEA and in the APAC region. In addition, in the U.K., we had the emergence through Q2 of budgetary concerns for October. All of these things dampened the compulsion to transact, despite the underlying trend, we believe, of positive improvement across the globe. I'd emphasize here that we believe the quieter Q2 period was a hiatus in execution for both investors and occupiers, and not a reduction in intent.
In light of that, and some adverse currency movements due to the strength of sterling, we're pleased to come away with a 6% increase in top line and the operating leverage driving a near 10% improvement in underlying profits. I would point out the rather anomalous looking underlying basic earnings per share performance during the period. That is entirely down to a prior year tax adjustment, which affects the underlying earnings per share. That is a one-off and will be largely washed through as the numbers get larger through the balance of the year. Our cash flow movements, you'll notice we moved into a small net debt position at half a year, and that shouldn't be a surprise to those of you who've followed us for a number of years now, and I'll talk a bit more about cash in a second.
Finally, as you've seen, we've put the interim dividend up over 4%, which is supported by the performance of our less transactional business lines. If we now turn to the performance of our business. On the transactional side, you can see moderate growth yielding a better bottom line at the half year, much of which was associated with cost savings and improved performance in a number of markets. We'll go into that in a moment. The consultancy business performed very well. I should point out that approximately 1/2 of that 20% revenue growth was down to the first-time consolidation of our Indian consultancy business, remembering we took a control position in August last year, September last year, I should say. Much of that is property project management, and it affects top line, but actually didn't significantly affect the bottom line in the period due to timings on revenue.
You can consider that 14% growth largely organic on the consultancy business as a whole. Excuse me. Our property management business, as you've seen, grew 6% in constant currency, 5% nominal. The bottom line overall was really affected by two things during this half year: the timing of investment versus revenue on new contracts, won in many locations, and the reduced contribution from treasury operations in a lower interest rate environment than this time last year. Finally, as you've seen, our investment management revenue fell slightly through the reduced management to performance fees that have been referenced, but the effect of prior period cost savings improved our margin by 350 basis points, period on period. If we turn now to where we made money.
As you'll recall, from 1st of January, our U.K. and continental European and Middle Eastern business management was combined under a single EMEA board for the region as a whole. That was done with a view to improving the linkage between our businesses and the linkage in the treatment of our clients. That is working. As promised in this transition year, we have full disclosure in the appendix to this document, which will appear on the web shortly, of the old U.K. and old continental European and Middle East contributions to the now EMEA performance. I am delighted that we have benefited from this combination, together with the restructuring savings and renewed growth in continental Europe, to post a healthy increase in revenue and that significant increase in profits, despite some still challenging market conditions.
In Asia-Pacific, our commercial transaction business continued to be challenged with year-on-year reductions in activity in a number of countries, and I'll go into it in a moment, mitigated by growth in Hong Kong, Taipei, and Korea in particular. Meanwhile, the positive impact of restructuring largely in mainland China and Australia helped us to improve the margin. Finally, in North America, delays on large occupier transactions and project management assignments in Q2, compared with the same period last year, took revenue down by 6% as reported, 4% in constant currency. This, together with continued investment growth in the brokerage base, increased losses during the period. I would add that our mandated pipeline in North America has never been stronger, with a year-on-year increase at the 30th of June of over 21%, and with the large assignment element of that increase of 37%.
I turn now to our cash flow before going into more detail on the businesses. You can see our working capital utilization largely through the increase in receivables through trading, and you can see a reasonably significant move in our financing and investing activities, really down to three or four things. First up, there was a reduction in the investment cash flows year- on- year because you'll recall this time last year, we'd received £10 million from Samsung Life on the exercise of its option to acquire 3% more of Savills Investment Management. That clearly was a one-off in that instance, not repeated this year.
Furthermore, we have a larger investment by the employee benefit trusts in H1 into share purchases at a time when we were able to acquire shares at lower than the face value of the original awards, and the trustees elected to increase the hedging position as a result of that. We've also had a significant increase year- on- year in dividends, about £10 million, and in taxation as well. The final piece is the loss on FX translation because of sterling strength, which is the majority of that final bridge point marked other on the right-hand side of this schedule. All this culminated in the small net debt position at the 30th of June, but just to reassure you that our normal cash flow profile is functioning, by the end of July, that had converted to a £31 million net cash position.
If we now go into our business lines in performance in more detail, starting with the commercial transaction business. Globally, our leasing business grew by about 4% during the period, which was comprised of a 22% increase in EMEA and 38% in APAC, together with a decline I've already mentioned in North America for the reasons I've already set out. That, in summary, really caused the overall drop of 2% in the commercial transaction advisory business for the period. In local currency, it was actually up 0.5%, so call it stable. Other than the large leasing transactions, it's really the capital markets business which felt the brunt of the Q2 slowdown we've been referencing. If you look at overall market volumes during the year, during the half year, courtesy of MSCI, you can see it quite starkly affected those countries that were to be affected by tariffs.
The U.K. was down, market was down 13% year-o n- year, EMEA as a whole down 7%, Asia-Pacific down 13%, but Greater China in there was down 26%. The bright light was the U.S., where capital transactions were up 10%, which was wonderful, bar the fact that we have a very small capital markets business relative to our peers in the U.S. market. Our capital markets revenues fundamentally reflected our weighting to those markets more affected by this Q2 uncertainty.
Our overall capital markets revenue growth of 3% bucked the trend and speaks to increased market shares, reflecting a 37% increase in revenue in EMEA, which is very solid, with significant growth in Spain, Germany, and France, albeit the latter two off very low bases, as you'll recall. There was a small decline in the U.K., which again speaks to market share improvements, as we were about half the market decline overall. In Asia-Pacific, our capital markets revenue declined 36%, centered around China, Australia, Japan, and Vietnam, the latter two markets against an unusually strong comparable in the first- half of last year. Finally, we enjoyed a small increase in our U.S. capital markets practice. Under the circumstances, we were pleased with this performance, and our global pipelines are stronger than ever.
On the bottom line, the restructuring we conducted last year also helped us to reduce the underlying loss at the halfway stage. Flipping now to residential. Overall growth came from U.K. development sales off a low base, it should be said, U.K. institutional residential transactions, that's multifamily, student, etc., and 74% growth out of Southern Europe and the Middle East. This is offset by a decline of 8% in our U.K. residential agency for reasons you will well understand. In Asia-Pacific, growth was driven by Australia, Singapore, Vietnam, and India, and the maiden Middle East profit net of continued growth costs drove the increase in our residential profits during the period.
If we turn now to our less transactional service lines, starting with property management, as you can see, the proportionality of our business is pretty much even between EMEA and Asia-Pacific, and their growth rates in the period in local market are not dissimilar. 7% in EMEA and actually in local currency, 6% in APAC, which reduces to the 2% on reported, as you see here. In the U.K., property and facilities management grew at high single digits, with rural management flat and residential management, including lettings, at 4%. Profitability was reduced during the period by investment in lettings in advance of the renter's rights bill coming through in the U.K. and by reduced contribution from treasury in a lower interest rate environment.
In continental Europe, gross revenue growth of 15% was driven largely by Germany, Spain, and the Middle East, but profitability held back by continued investment in a number of countries as we seek to scale up further. While in APAC, significant growth in both PM and FM in Singapore was counterbalanced by double-digit reduction in mainland China, both as a result of ad hoc work reducing in more challenging market environments, which is typical, and also as a result of contracts we'd given up through our restructuring in tier two and three cities last year. We've also, in China, continued to roll out a significant IT and automation program, which will yield benefits progressively over the coming years. We turn to consultancy now.
In EMEA, we saw revenue growth at the higher end of our normal expectations, with significant increases in leisure, rural, and housing consultancy in particular, and a significant increase in profitability during the period. In APAC, headline growth was largely due to the first-time consolidation, as I said, of our Indian project management business. Absent that, the underlying growth of the APAC region is about 7%. It's the lower end of our normal expectations, but it reflects the impact of lower market transaction volumes on security valuations during the period. In North America, the revenue reduction, 5% as reported, 2% in constant currency, reflects the timing of revenue on some major project management contracts in Manhattan, largely offset by improvements in life sciences and in workplace consultancy.
Finally, at the profit line, EMEA growth and the benefit of prior period restructuring in APAC that I referenced outweighed the reduction in North America to enable that 14% increase overall year- over- year. If we finally move to investment management, as you've heard, base management fees represented 89%, which I think is the largest ever of investment management's revenue, and we reduced by about 6% due to the impact of aggregate changes and recalibration, I should say, in gross asset value and net asset value, which drives the calculation of those base fees through the first half of this year. We are really talking about the 2024 recalibration having that effect. Performance fees were down 60% year- on- year, but that's largely down to a reduction in disposal activity because our overall performance of our discretionary funds, which is 70%, is outperforming its target or benchmark since inception.
The good news in the revenue line is that transaction fees were up 21%, which feeds to improved deployment and growth in local operating partner asset management contracts, particularly in southern Europe. This latter point is particularly important in a world where raising capital for blind pooled core funds remains very challenging. As Mark said, AUM was stable, growing slightly, and reflecting the net effect of revaluation offset by new product issuance. I particularly draw out our Simply Affordable Homes Fund, which is rapidly investing its initial and first follow-on capital, our growing Pan-European Whole Loan Fund, and our brown-to-green office repositioning debt product, which is really gathering momentum. At the bottom line, the restructuring of last year helped Savills Investment Management to increase its profits by 30% year- on- year. With that, I'll hand you back for the last time to Mark.
Thank you, Simon. Okay. Before I highlight the business development activities we undertook in the first- half of the year, I did think it worthwhile to perhaps remind you of the strategic priorities for the main areas of our client services. Starting with investor services, the lights come back on as well. Whilst capital market transaction revenues have reduced in a number of markets which we have referenced, they will rebound back and pipelines remain exceptionally strong. Hence, we are continuing to strengthen our capital markets capability in many key markets, as well as ensuring we have the appropriate level of sector coverage and specialization as investors look for returns across alternative sectors to continue to rebalance their portfolios.
Turning to occupier and leasing services, we're continuing the build-out of our global occupier services platform, as well as ensuring we've got the necessary infrastructure to supply all associated services in a cost-effective and efficient manner. With the resurgence of retail interest, we are continuing to focus on our prime global retail platform within the markets that retailers are now focused on. Finally, in line with the residential market activity highlighted earlier, our focus remains on developing a wholly owned network of prime global residential sales and consultancy services in the main markets across EMEA and APAC. The linkage of this network is being further facilitated by strengthening our private office and cross-border activities for high net worth and family offices to access the markets they need. Moving on to our regional updates, starting with EMEA, which obviously includes now U.K.
As Simon referenced, our overall revenue here of an increase of 9% was driven mainly by market share gains across the main transactional markets, with continued growth across our resilient business lines of consultancy and property management. During the period, we completed the acquisition of Osborne King and established a full-service business in Northern Ireland, as well as expanding our capital markets expertise in a number of specialist areas, reflecting the investor appetite I referenced earlier.
From a capital market share perspective, we maintained our leading positions across many markets, including the U.K., Spain, and Ireland, and this also allowed us to undertake some of the largest transactions during H1, including advising Australian Super on the acquisition of a large Pan-European logistics portfolio from Oxford Properties, advising Tristan Capital Partners on a portfolio of 50 hotels totaling some €400 million, as well as advising Nido Living on the Lavenza Living portfolio, a landmark €1.2 billion transaction, and the largest ever student accommodation deal transacted across mainland Europe. In line with the strategic focus outlined earlier, we continue to grow our industrial and logistics platform across core markets in EMEA, allowing us to maintain our number one position in the U.K. on industrial leasing, where we transacted over 4 million sq ft in H1, as well as strengthening our prime retail teams in the key European centers.
Across the office sector, our teams were extremely active, concluding lettings of over 240,000 sq ft to Legal & General and Handelsbanken at Wallgate in the city, advised the Premier League on their acquisition of 70,000 sq f t at Olympia, and our retail teams undertook a number of the most significant retail transactions during this year, including acquiring a new flagship store for Mango on Oxford Street. Continuing the focus of the development of the global occupier services business, we're also pleased to be awarded mandates from Howden, Capgemini, and BT, maintaining our strong momentum in this area. Turning to residential services, we consolidated our ownership across a number of key European markets and continued investing across the UAE, where we now have over 180 residential brokers active across these markets.
Our focus on prime residential markets allowed us to maintain strong market share on transactions over £5 million in London, actually around 20%. Also, within the rural markets, we secured a 43% market share on properties over 1,000 acres. This included the sale of the Sutton Bridge estate in Lincoln, extending to over 5,000 acres, indicating the strength of this continued market interest. Turning now to Asia-Pacific. Across this region, we saw overall revenues grow 5%, as Simon's referenced, driven by the strong performance in consultancy, a resilient performance in property management, whilst our transactional revenues did experience a decline, albeit significantly less than the market declines. During the last six months, we made a number of key appointments, including the recruitment of new CEOs heading Australia and New Zealand and Japan, whilst undertaking the full integration of our newly acquired platform in the Philippines.
Focusing on our investor services, we significantly strengthened our Australian capital markets platform with a new national head and market-leading team in New South Wales. In Singapore, we've continued our rapid organic growth of our facilities management business, appointing a new IFM head, and it's also worth noting that the platform itself grew its revenues by some 22% during the period. We also established a new capital markets team in India and acquired an asset management platform to complement our activities in Japan.
In terms of market activity, this allowed us to maintain our dominant market position on large capital transactions in Hong Kong, just over 42% market share, as well as maintaining number one spot on capital market transactions in Korea, where we transacted over $2.5 billion worth of trade, including the sale of the asset, the largest single property transaction traded at over $800 million in the last 12 months. Within occupier and leasing services, we grew our centralized hub for lease administration in Global's Occupier Services in Manila, as well as establishing a new tenant rep team in Shanghai. We also enhanced our industrial logistics capabilities across New South Wales, Australia, with over 18 new brokers. Thanks to this investment, our Global Occupier Services teams were awarded contracts during the period by Experian and Medtronic, whilst our tenant rep teams also acted for Black & Veatch across the region.
Within residential services, we undertook a number of the highest value individual transactions in the region, including the sale of the penthouse at Opus, Hong Kong, for over $65 million, the sale of the prime freehold landed development at Bedok Avenue in Singapore for over SGD 50 million, and the penthouse on Sydney Harbourside for AUD 55 million. Moving on to America. Simon has already mentioned the variations in activity we experienced across a number of markets, and despite the revenue reduction, the transaction pipeline remains strong. As a counterbalance, we saw revenue improvement in markets including New York, Boston, and Chicago. Outside the office sector, our industrial and logistics revenue actually grew by some 25%, with stable revenues attached to our Global Occupier Services platform.
Turning to business development during the first- half, we have just completed the acquisition of a leading move management consultancy platform called Hoffman, headquartered in New York, which clearly adds to our consultancy services around the occupier. We've also appointed new leadership teams in New York, Washington, and Austin, and continued the expansion of our tenant rep capability, onboarding 27 senior new brokers. In terms of the regional expansion during the period, we opened a new office in San Antonio and extended our network across Canada, focused on Montreal and Toronto. The strategic benefit of this continued investment in our Global Occupier Services business is clearly evidenced with new accounts won from Moderna across 45 locations, MKS Instruments across 191 locations, as well as indeed.com across 37 global locations with a strong future pipeline. Finally, Savills Investment Management.
As you have heard, our overall revenue declined by some 6%, but our capital raising activity remains on track with just under £1 billion worth of new equity raised. Whilst market conditions do remain challenging, we anticipate further improvements in H2. As Simon's also referenced, the resilience of our base management fee is also very apparent, now representing some 89% of gross revenue. In terms of the business development focus, it's really very much the continued performance of our funds, with over 70% of our discretionary AUM outperforming their targets. The success in the capital raising area allowed us to launch Savills IM 's first APAC mandate with a global strategic client, initially some $120 million to deploy, whilst the Italian SGR business continued its strong momentum with over EUR 700 million of new inflows during the year.
In addition, we're making good progress on a number of segregated mandates for clients, including Co-op and KOBC, and currently have around about £1.2 billion worth of dry powder in total to transact during the year as market conditions allow. Now, moving on to summary and outlook. I am very pleased with the improved performance during the first- half, which is driven in part by a recovery across a number of the transactional markets, particularly during the first quarter. The temporary hesitation in market momentum, which we experienced during Q2, was influenced obviously by the economic uncertainty from trade tariffs, but this has now translated into stronger transactional pipelines, which we are carrying into H2. I'm also very pleased with the continued growth and positive performance of our less transactional businesses, and in particular the strong revenue growth of our consultancy business.
Looking forward, our commercial pipelines are in fact stronger than ever, and our EMEA residential business is continuing successfully to grow as we continue the build-out. This secure footing and the balanced strength of our business should allow us to accelerate the business development through the recovery cycle, with more opportunities now presenting themselves. In light of the performance, our expectations for the full year remain unchanged, albeit the usual second half weighting and final outcome is obviously dependent on the pace of our transactional pipelines being unlocked during H2. Thank you for attending today's webinar. Simon and I will now be more than happy to answer any questions that you have, and hopefully the lights will stay on during this session. Thank you. Let me see any questions.
Just a moment.
Yeah.
See if anybody's typing. I think it looks like you've covered everything, Mark.
I hope I haven't bored you, and that you have got all the answers you need through that presentation. In the appendices, there's quite a lot of further information which we haven't covered. If there are any questions that you would like us to ask going forward, please do get in touch, and we'll make sure we try and answer those. With that, I'm going to say a very fond farewell. Thank you very much. I obviously remain in office until the end of the year. Thank you very much indeed for your continued... Oh, we have lost.
We've found some questions.
There we go. Good. I'll go back now.
Should I do a bit of reading first while Mark, you can take a break? This one's for Chris Millington. First, I wanted to wish Mark the best of luck for his next chapter. It's been a pleasure working with you. Could you please comment on the expectations for net cash at year end? How should we think about Savills' desire for acquisitions? Would the company run leverage if the right opportunity presented? How do you think Savills' market share in North America leasing fared in H1? Do you think the region can be profitable in the full year? Can you add any numbers, geographic commentaries, the commentary around strong pipelines? [crosstalk]
Should I start?
Yeah, please.
With the cash, et cetera?
Yeah.
As I indicated just now, with the return to net cash in July, I mean, pretty marked and very normal for us. We would expect our normal level of cash flow generation to occur through the balance of this year. You know, absent transactional substance, moving into solid net cash again for year end. That plays into the second question, which was around desire for acquisitions and appetite for leverage if the right opportunity is presented. Do you want to do the first question? [crosstalk] I'll do the second.
Chris, I think you know we sort of framed where we are focused. You've seen us obviously traditionally acquire platforms, which probably when we made sort of M&A acquisitions, they're more likely to be in the sort of consultancy, property management, facilities management. They're established platforms to add to, and whilst that still continues, and that will continue, some of the transactional market activities meant that the pricing has somewhat moderated. Areas like prime residential, prime global residential, these will be potentially market opportunities for us to continue to grow our presence going forward. More to come in that. Global occupier services again, if there are adjacencies in markets that we feel would be additive, again, whilst we're doing our organic growth there, that would also continue. Probably, Simon, capital markets, where we've done a lot of organic growth.
Yeah, I think particularly as a generality, opportunities to diversify our business in North America, we will look at seriously. There is undoubtedly, whether it's investment management or anything else, a more realistic approach to valuation currently than there has been for probably the last five to 10 years. We'll certainly look to those. Following on to the financing point, the reality is if the right opportunity presents itself, you know, we are a strong cash flow generation business and not averse to running leverage for a period if that is the appropriate way to finance a sensible transaction. I'm not wedded to a net cash balance sheet at all times at all. It's got to be for the right opportunity. Critically, keeping discipline on pricing is an absolute prerequisite to that. Market share in North American leasing, you're looking at that?
Yeah, I think in terms of what we saw there, Chris, it was very much around the larger transactions being the ones where there was a level of hesitancy. The normalized volume actually remained pretty constant. Of course, the larger ticket sizes do affect revenue and profitability. We've got a significant pipeline, and actually, the pipeline, Simon, has increased. We've done an examination of our pipeline, and it's actually increased some 30% thereabouts.
Yeah, so we're 37% up on the large transactions, as I said, and we're 21%+ on all transactions. Just to give you an indication, that equates to, and I should caveat what I'm about to say, the known pipeline, because there is always a degree of activity which doesn't appear in the pipeline at this point. Sometimes not until very close to transaction. The known pipeline at the half year ran to about $150 million, which was substantially up, as I said, on the same period last year. That's for Savills North American occupier transactions. I would say that without adding any more numbers, because I think it's invidious to do so, if you looked at the pipelines for both capital markets and leasing around the globe, you would see probably the strongest ever, actually, in almost every market that we operate in.
As we said earlier in the piece, the exam question for us all is how much of that executes in the second half of 2025. To some extent, that'll be what it is. I'm just extraordinarily pleased that we're seeing that fundamental underlying building of the pipeline. The next question was Clyde, which was what does the acquisition pipeline look like? I'm just calling you out because I think we've probably answered that one. At any moment, just to recall, we've normally got something around $400 million or so of potential desired expansion coming from around the globe into the center. That is probably somewhat larger at the moment. That is larger probably because of a deliberate trend to look towards rather more substantive acquisitions than a lot of what we've done over recent years, which is sub $10 million bolt-on stuff. There is a push to do things that turn the dial in individual markets for us a little bit more obviously. Other than that, you have to wait and see. I think that's a repetition of Chris's. Clyde, how's the Chinese market evolving?
Okay. I take that. Obviously, market volume is significantly down in China, but actually, we're very pleased with our business. It's obviously significantly weighted towards property and facilities management consultancy, so our transactional exposure is smaller, and where it is exposed is to tier one cities, prime markets. It's gone through a difficult period, but we think that recalibration is starting to come through the other side. We've also taken action in tier two, tier three cities to reduce, where necessary, our own footprint and focus on where we feel that we can continue to expand and make money from.
I think we're in a very good position now. I would say sentiment is starting to improve. I referenced the increase in residential sales in tier one cities. We're also seeing a lot of mainland activity into Hong Kong and vice versa. I think we are starting to see improved activity. It'll take time, but I do think in the second half it will show that improvement.
The final question from Michael Foster. I have to confess, I don't actually understand the acronyms. I don't know, Mark, whether you can help me out on that. The question is, do we expect new CEO to carry on as normal, or will there be a CMD? I'm trying to, for the life of me, work out what CMD means. Unless you know, write it on a postcard, please, if anybody out there knows.
Obviously, this is a period of transition, and I've been here for, will have been here for 17 years before the January handover. It would be an enormous surprise if there was a radical change in strategy, but you should probably expect to see the continuation of a focus that we have on improving our returns as an organization, as well as seeking growth in the areas that Mark was talking about. Beyond that, I think wait till March next year, but don't expect anything radical. Okay. Clyde's on.
Prime residential market evolves to H2 and into. Okay, so you know that segment, the prime residential markets U.K.-wide, particularly Central London, Clyde, have had a tough quarter. There's no doubt about it. We are starting to see, I referenced the fall of pricing in that. It is starting now to correlate into improved activity, domestic as well as international. Domestic is still actually the largest part of that prime domestic market in London. Of course, non-dom status tax concerns have dampened activity. Actually, things like, once the budget is out of the way, and people can see the horizon, activity will improve. It's already, sentiment is already improving. The prime regional markets probably enjoyed a very strong run from COVID through post-COVID. They had their sort of day in the sun. Maybe the pricing got a little bit too toppy, and maybe there's that level of reduction.
We have seen price falls in it. Underlying, stock levels for our residential business are up some 17%. We do expect, again, same thing that Simon said about the commercial markets, we do expect to see the unlock occurring. Overall, momentum and sentiment somewhat improved.
I'm going to say, Michael asked a follow-up call on vision, a point on vision and strategy of the new CEO. I'm going to plead the fifth on that right now. I think if you've heard what I said before, that's a matter where I think it's fair for you to interrogate me in March next year. Clyde has gone on to say main organic investments in the second half of the year. That involves CapEx clearly and business expansion. Do you want to do business expansion? I'll do the CapEx piece because I referenced we're investing a lot in China in particular as a test bench for digital automation of PM property management. That's being rolled out progressively through the very large estate that we have there to enable greater centralization. That's a multi-year program, but it will obviously continue through the second half of this year.
We're commencing the same in Hong Kong, and we're doing a lot of more conventional ERP system implementations, particularly in the EMEA region at the moment. You'll recall we launched the U.S. system last year. EMEA, and particularly the Middle East, will become a quite significant focus for this year to support the growth of that business as we look through the next few years.
Agreed. Just in terms of the organic focus, it is around markets that we believe will recover. Starting on transactions, normally it is organic growth that we undertake in the transaction sector. Residentially, we've been growing the prime markets like Australia organically, the same in prime Southern Europe organically. We're adding to that, and we're continuing to recruit people, really good people. There are a number of significant team lifts that are underway, which should come in H2. If I flip over to North America, the sector diversification is something we are primarily still an office-focused business there, albeit growing industrial logistics. Retail is small, and we're very strong in retail in other U.K., European, and APAC markets. I think we are likely to look at organic growth in the main centers in North America going forward. The speed and timing of that is dependent, obviously, on the success of our discussions.
Clyde has also followed up with, is there much distressed activity happening at present? Can you comment around funding for the sector, especially in EMEA? I suppose as a background context, we would say we're clearly through the trough in EMEA. If you look at the markets that were most badly affected by downturn in transactions, by the rise in interest rates, by the requirement to recalibrate, and therefore all the components of distress, Germany and France, we've seen actually reasonably significant improvements in underlying activity during this first- half. I think that's probably symptomatic of the improvements more generally. Southern Europe, I mean, Spain has been an extremely strong performer, probably the strongest performing real estate market on the planet, actually. Pound for pound, I want to say, Euro for Euro in the period. There is plenty of investor interest in those markets and definitely an increasing investor interest into Germany and France.
I think the other thing, just in terms of the funding perspective, I mean, look, I think we've seen a lot of value add raising, looking for those opportunities. I think the money is there. It's finding the opportunities and the distress, where the banks are forgiving. There's still some to come, particularly in secondary offices, etc., the sectors that we know may have still greater stress to come. I think there won't be a problem with the funding. It's more about when the liquidity comes going forward. I'd expect an unlock of that over the next six to 12 months as well.
Clyde reiterates the best for you in your retirement. I'm delighted that both the questioner, Michael, and Chris, and Clyde have all reliably informed me that CMD means Capital Markets Day or Capital Markets Event. That does actually prompt me to say we have, for the first time in Savills' history, hired a Head of Investor Relations, which as I transition into Mark's seat is a reflection of the fact that we just can't do it as the executives by ourselves. She starts in October. To the specific point about Capital Markets Days, we will look at the best way of really showcasing our strategy, whether it is a series of small lunchtime type events, focusing on a specific piece of the world, or whether it's a Capital Markets Day itself, which does ask a lot of attendees. I'll preserve the fifth at the moment, but we certainly will be doing more of that.
Whilst that continues, just to let people know, I will be staying as a consultant to Simon at the Board, so I'm not just digging holes in the garden. If there is a Capital Markets Day, I can come as a spectator and ask questions as a shareholder.
I'll ask the toughest questions of the lot.
Okay, is there any other question?
I think that's it on questions. We've had a flurry of offers that it's the Capital Markets Day, so that's good. Thank you.
In which case, if there's no more questions, can I thank you all for attending today? Bear in mind there's been this heat wave going on. Also, you know, thanks for your continued support of Savills, continued support of Simon and I, and we will remain in touch. Simon, I look forward to a very exciting chapter starting with Simon at the helm of the business. With that, I'm going to say goodbye.
Thank you.
Thanks very much.