It’s not all doom and gloom
There is no denying that 2016 was a dramatic year resulting in a great deal of uncertainty, and obviously not just for the real estate industry.
As we move further into 2017 the outlook for the year is still far from certain with continued negativity in the market.
Much of the blame is aimed at Brexit although, in truth, the slowdown in some areas was already noticeable. A crystal ball would come in handy right about now!
The first quarter of this year will be momentous as the UK’s decision to leave the EU will finally come to fruition as we are given a clearer idea of what to expect as well as the realistic impact it will have on market sentiment.
Our businesses overarching forecast, combining the rural sector with the office, industrial, retail and residential sectors, is for total returns of 1.9 per cent for 2017, representing a significant drop from last year’s 6.1 per cent.
However, it is not all doom and gloom. Cambridge is one of the fastest growing economic regions and commercial hubs in the UK so it is not unsurprising that we actually expect to continue to see opportunities in and around the city throughout 2017, especially in terms of demand for office space, well-let investments and in the industrial and R & D sectors.
Yes, there might be some nervousness from our clients but that is where our market knowledge and depth of experience as well as long-forged relationships will come into their own and show their worth.
Even with the uncertainty, demand for Grade A offices in Cambridge is still outweighing supply and we don’t expect that to change – especially as many of the new developments are already pre-let such as CB1, which we ourselves will be relocating to in the not too distant future.
These new build developments are still proving popular due to the sensibly configured floors, that older properties in the city centre are unable to provide, and the extensive facilities onsite and nearby.
In recent years, the importance of an office’s location and access to a selection of shops and restaurants has become vital in attracting the best employees. The proof really is in the pudding!
Undeniably the research, science and technology sectors are going to be ones to watch this year. 2016 saw ARM Holdings pledge to stay in the UK, even after its sale, and expand its headquarters at Peterhouse Technology Park.
This was a significant statement of commitment that confirmed that the East of England is continuing to be a desirable location that has helped to grow and develop one of the UK’s largest companies.
Further development of the London-Stansted-Cambridge corridor and Enterprise Zone will also continue to support these businesses with the ongoing construction of new and high-tech accommodation such as KAO Park near Harlow.
The added pledge to these industries by the Government is likely to ensure they remain strong this year and unaffected by the EU quibbles. Separately, the Government’s obligation to major infrastructure projects, will in our view, reiterate the importance of growth in the East of England and the contribution the region makes to national economic prosperity.
However, for the time being it is business as usual. We will continue to advise our clients in the best way we know how and keep our ear to the ground for new and viable opportunities for them.
Yes, we are probably in for a bumpy ride this year but we will club together and fight our way through it, after all, we are British and ultimately, there is no other option.