Over 35 guests attended Colliers CRE's, "When will the Sky Stop Falling" seminar on Tuesday, 21st May. The presentation, which was held at Kings College, focussed on the current state of the economy, both in the UK and Cambridgeshire, with forecasts for when Colliers believes the economic and commercial property sector would recover.
The speakers at the event, all from Colliers CRE, comprised Edward Dodson, Head of Collier's Cambridge office; Dr Walter Boettcher, Head of Forecasting; André James, Head of Investment and Chris Rodericks, Director of Valuation.
Highlights from the seminar included Colliers CRE's view that Cambridgeshire's economy is not expected to contract as greatly as the rest of the UK. Colliers believes that Cambridgeshire will outperform the UK as a whole by at least a full percentage point on Gross Domestic Product, helped in no small part by the region's diverse mix of businesses.
During the presentation, Dr Walter Boettcher asked for a show of hands as to when the audience felt the economy would show the first quarter of positive GDP growth. Interestingly, 45% of the audience predicted as late as the third quarter of 2010.
The research then addressed how the region's property market is holding up in more detail.
Whilst Cambridgeshire has fared better than most of the UK, Colliers CRE noted that there were certain areas which had been hit harder by the recession, for example:
- Only 30,000 sq ft of office space was let in the first quarter of 2009 (compared to over 120,000 sq.ft. in the same period 2008), showing that most local businesses are not expanding and new offices are not being opened.
- Landlords are being hit hardest, having to increase their incentives, with large rent free periods being offered, in order to secure tenants.
- Some of the bigger businesses in the county are downsizing or even leaving the area, for example Kodak and Sony.
- There are many more empty shops in the city centre compared to the year before, last reported to be over 25 as opposed to less than 5 at a similar time in 2008 (Grand Arcade excluded) and fewer retailers willing to take up the void space.
But there were still many positive points to take away:
- Cambridge's residential market is bucking the trend, with top end family residences in the City attracting competitive bidding.
- IT companies and public sector bodies are increasing their work forces, thus creating more jobs for the region.
- There is little available prime office space, which is helping to sustain rental levels.
- Enquiries and viewings are up on all types of property.
- Local commercial auction sales show strong performance with cash buyers snapping up well let secondary investments.
Commenting on the research findings, Edward Dodson, Head of Collier's Cambridge office said:
"It is very reassuring to see Cambridgeshire holding its own in the current climate. We do believe there will be some signs of activity in the national investment market, maybe the first green shoots of recovery, as early as October this year. But whether this is a short term bounce or a more sustained period of recovery only time will tell, but our forecast indicators are encouraging."
For further information on the seminar, or on the Cambridge property market in general, please contact Edward Dodson or Helen McGuire on 01223 368468.
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