SAVILLS, the international property adviser, has published its trading update for the year ending December 31, 2003, prior to the announcement of its preliminary results in March next year.

A spokesman for the company said that when it released results for the six months ended June 30 2003 in September, the chairman reported that the group remained "cautiously confident about the outlook for the full year".

Since then, market conditions had generally improved.

"Despite continuing weaknesses in leasing markets in London and the South East, there are signs of renewed tenant interest," he said. And there is still good demand for well-located out of town retail schemes.

"Sales of new homes have also increased, with continuing interest from investors."

He said Savills Private Finance was having "an outstanding year and is performing well ahead of plan".

The board expected to recommend a significantly increased final dividend.

"With generally improved confidence in the UK economy and little impact so far of increased interest rates, property markets, after a slow start, have performed better in the second half of the year than expected," the spokesman said.

"On this basis, the board believes that the full year profits will materially exceed current market expectations."