Savills report on the residential market
Cambridge’s property markets have shown encouraging resilience across the board despite significant disruptions caused by the national lockdowns.
Savills reported that the city of Cambridge saw a significant rise in the volume of £1 million plus homes sold last year – an increase also reflected in wider South Cambridgeshire as lockdown restrictions fuelled demand for larger houses.
Their research indicates that 120 high-end properties with a £1 million plus price tag were sold in Cambridge city last year, up 40% from the 85 sold in 2019. In South Cambridgeshire there was a 59% rise, with 100 £1m plus homes sold compared to 63 the previous year. In the East of England as a whole there were 147,194 sales of homes worth more than £1m – a rise of 21%.
This demand has also resulted in house price growth in the high-end market. Cambridge city has experienced a 4.1% price growth in this housing range whilst South Cambridgeshire has seen a 5.8% increase. Average house prices meanwhile sit at £518,000 in Cambridge itself and £413,000 in South Cambridgeshire, compared to an average house price of £340,000 across the East of England.
Ed Meyer, head of the residential team at Savills Cambridge, said the local property market had defied expectations, with the pandemic encouraging people to revaluate what they want from their homes.
He said: “Lockdown gave people the time and opportunity to reassess their needs. Our homes now perform a variety of functions – they are an office, a gym, a school, a playground and a restaurant. As a result, people have reassessed the space they live in and the attributes they most value in a property”.
Bidwells report on the office and laboratories market
Bidwells has also reported high activity levels in the office and laboratories market in a recent report.
Confirmation that US software company MathWorks group has agreed to lease the new 93,000 sq ft TusPark development at Cambridge Science Park represents the largest office letting in five years.
Schroder UK Real Estate Fund has also agreed the £45m funding for the development of the 99,750 sq ft One Cambridge Square building in Brookgate’s urban quarter regeneration scheme, opposite Cambridge North station. This project adds to a flurry of activity at Cambridge North that will provide a gateway to the established business clusters of Cambridge Science Park, Cambridge Business Park and St John’s Innovation Park, which jointly provide 2.4 million sq ft of office and laboratory floor space.
Combined office and laboratory take up in Cambridge totaled 454,300 sq ft in 2020, with H2 activity returning to expected levels after the nationally imposed lockdown affected the first half of the year. Demand for office and laboratory space has remained stable at 1.3 million sq ft.
However, Cambridge’s knowledge market has dominated local demand. 69% of 2020’s take-up in office and lab space has been by knowledge-intensive businesses, demonstrating the significant boosting effect this sector has on the local economy.
Office and laboratory supply edged up to 925,800 sq ft driven by the release of second-hand space onto the market. Several new schemes are due to complete in the next 12 months, totalling 836,000 sq ft. More than 84% of this space is already committed, leaving just under 130,000 sq ft that will come to the market. A further 160,000 sq ft is due to reach practical completion in 2022, with 40% already pre-let.
With supply struggling to meet this increased demand, prime rents in this sector have reached a new height of £48.50 psf. Demand for prime space across the market has resulted in the office and laboratory sectors showing severe shortages of Grade A stock. The laboratory sector is facing a particular challenge with over 400,000 sq ft of requirements, the highest level for five years, set against an availability rate of just 3.7%.
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