Clear evidence of commercial property upsurge
The end of the summer brought with it a marked increase in demand for offices which has come as a welcome relief after a period of sluggish activity. Confidence is returning, companies are out viewing and transaction levels are up for the first time in 18 months, reports Ben Green, head of office agency at Cheffins.
Demand is coming from a range of businesses with the technology sector being particularly active, buoyed by a number of new start-ups and a fresh injection of venture capital funding. Cheffins, for example, has recently let expansion space to fast growing bio tech firm BlueGnome at the popular Mill Court in Great Shelford. The development is nearly fully let with only one office suite of 679 sq ft remaining.
Another example of recent activity includes the letting by Cheffins of Newnham Mill, near Queen’s College, a key landmark on the west side of the city. Totalling 3,886 sq ft, and formerly occupied by PR and advertising company, Ware Anthony Rust, it has been taken at a rent of £65,000 per annum exclusive by Bluestone Capital Management, a leading, portfolio and capital management business with offices in Australia, New Zealand and the UK.
The upsurge in activity is not just restricted to occupiers, with investors and developers also returning to the market to take advantage of depressed prices. This is demonstrated by sale agreements negotiated by Cheffins on two office buildings in Cambridge and St Neots totalling 25,000 sq ft, one to a private investor and the other to a property development company.
Office availability has increased by around 30% over the past 12 months. Much of this relates to lower quality secondary accommodation, whereas the availability of prime offices has remained relatively stable. Indeed, the supply of new or refurbished accommodation is still restricted in certain locations, such as the city centre where new developments have been placed on hold.
Office rents on the whole have softened, although again there is a disparity between prime rents which have held firm and secondary rents which have fallen by as much as 25%. One factor, however, that remains common with all offices is the extended rent free periods and other incentives being offered in order to attract tenants.
FOR FURTHER INFORMATION,PLEASE CONTACT BEN GREEN AT CHEFFINS ON 01223 213666 OR EMAIL: ben.green@cheffins.co.uk.
