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Although a recent survey indicates the potential for strong growth in the East of England and the Cambridge commercial property market enjoying a welcome spate of deals at the end of 2009, Philip Woolner MA MRICS of Cheffins issues a warning note. With large scale public sector cutbacks looming, he suggests that Cambridge could be vulnerable as nearly 42% of the city’s jobs are in the public sector (compared to 23.2% for the region) - and for starters Cambridgeshire County Council has recently stated that up to 300 jobs and some services are to go, as it plans a £16m cut in its annual budget.
Reduced demand for goods and services could adversely affect the commercial property market across all sectors.
The survey by the Institute of Chartered Accountants suggests a significant 4.2 per cent growth in the region this year which coincides with a report, Cities Outlook 2010, which ranked Cambridge top in a list of 63 UK cities for the number of residents with degree-level qualifications (51.8%) as well as top for concentration of knowledge-intensive jobs held by residents (35.2%). It cites the city’s strong private sector, high levels of entrepreneurship, highly educated workforce and large share of knowledge-intensive jobs as being crucial to its success.
Philip Woolner : “There’s no doubt that a level of confidence has returned to the Cambridge market but continuing lack of bank finance for small companies, reported recently in a survey by the British Chamber of Commerce, could cause problems this year.
“So far the level of repossessions of commercial property has been fairly low, but I believe that the banks may well be bolder in 2010, with the result that more property assets will be forced onto the market. At the same time, firms will still be seeking to reduce their costs by releasing surplus space. Much of this will be secondary property but it could take the shine off the current recovery.”
He says that the autumn saw promising signs of improvement in and around Cambridge. “Towards the end of 2009 we enjoyed a lot of success – having been involved in deals totalling more than 150,000 sq ft, including offices, retail and industrial space. But the looming general election and the hesitant UK economy is likely to cast a shadow this year.
“Businesses may find decision-making hindered until a new government has been elected. Also, history shows that more insolvencies occur as the economy starts to turn – with smaller firms unable to finance renewed growth because of over-cautious lending by banks.”
Philip believes that in 2010 the current level of demand for top quality commercial property in and around Cambridge will continue but there could well be an overhang of supply of secondary stock, both freehold and to let.
Cheffins and some of the biggest deals
400 Cambridge Science Park letting
Newmarket Business Park pre-let
New Cambridge House sold at auction.
FOR FURTHER INFORMATION PLEASE CONTACT PHILIP WOOLNER ON 01223 213666.
Public Sector Cuts a Threat to Cambridge Commercial Property
Although a recent survey indicates the potential for strong growth in the East of England and the Cambridge commercial property market enjoying a welcome spate of deals at the end of 2009, Philip Woolner MA MRICS of Cheffins issues a warning note. With large scale public sector cutbacks looming, he suggests that Cambridge could be vulnerable as nearly 42% of the city’s jobs are in the public sector (compared to 23.2% for the region) - and for starters Cambridgeshire County Council has recently stated that up to 300 jobs and some services are to go, as it plans a £16m cut in its annual budget. Reduced demand for goods and services could adversely affect the commercial property market across all sectors.
The survey by the Institute of Chartered Accountants suggests a significant 4.2 per cent growth in the region this year which coincides with a report, Cities Outlook 2010, which ranked Cambridge top in a list of 63 UK cities for the number of residents with degree-level qualifications (51.8%) as well as top for concentration of knowledge-intensive jobs held by residents (35.2%). It cites the city’s strong private sector, high levels of entrepreneurship, highly educated workforce and large share of knowledge-intensive jobs as being crucial to its success.
Philip Woolner : “There’s no doubt that a level of confidence has returned to the Cambridge market but continuing lack of bank finance for small companies, reported recently in a survey by the British Chamber of Commerce, could cause problems this year.
“So far the level of repossessions of commercial property has been fairly low, but I believe that the banks may well be bolder in 2010, with the result that more property assets will be forced onto the market. At the same time, firms will still be seeking to reduce their costs by releasing surplus space. Much of this will be secondary property but it could take the shine off the current recovery.”
He says that the autumn saw promising signs of improvement in and around Cambridge. “Towards the end of 2009 we enjoyed a lot of success – having been involved in deals totalling more than 150,000 sq ft, including offices, retail and industrial space. But the looming general election and the hesitant UK economy is likely to cast a shadow this year.
“Businesses may find decision-making hindered until a new government has been elected. Also, history shows that more insolvencies occur as the economy starts to turn – with smaller firms unable to finance renewed growth because of over-cautious lending by banks.”
Philip believes that in 2010 the current level of demand for top quality commercial property in and around Cambridge will continue but there could well be an overhang of supply of secondary stock, both freehold and to let.
Cheffins and some of the biggest deals
400 Cambridge Science Park letting
Newmarket Business Park pre-let
New Cambridge House sold at auction.
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