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Market snapshot
Cambridge continues to attract a diverse investor base and the other Eastern Region markets are generating improved institutional investor interest. The occupational market dynamics are a compelling case to invest in the region
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Key data
Source: Savills Research
- The East of England office investment market continues to experience a resurgence in investor demand. The occupational market dynamics of limited supply and good levels of occupier demand has proved attractive to investors who are seeking growth opportunities.
- The investor demand is evident from investment volumes recorded in 2018, which by the end of Q3 were just below £200 million. This follows two strong years of office investment into the region with investment volumes surpassing £200 million in 2016 and 2017. It could be argued that 2018 turnover has been hindered from further increasing by a lack of large lot sizes coming to the market. Only 4% of deals recorded in the last five years have been above £50 million.
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Investment volumes
Source: Property Data
- Across the region the profile of investors active in the region is changing. Cambridge has deep investor interest from a variety of investors. The appeal of the market to corporate occupiers and the strong rental growth that the market is experiencing has appealed to UK institutions as well as overseas investors. This was highlighted by Royal London purchasing Cambridge Research Park for £78.0 million and Schroders acquiring The Quorum for £22.7 million in 2017.
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Investment by Purchaser Type*
Source: Property Data *For the time period 2014-2018
- The other markets in the region are smaller than Cambridge and have historically attracted interest from property companies and private individuals. In the smaller markets we are witnessing increasing interest from UK institutional investors who are seeking to refurbish secondary buildings and capitalise on the strong rental growth the market is experiencing.
- Institutional investors who have recently bought office buildings in smaller markets in the Eastern Region (outside of Cambridge) include Mayfair Capital, Kames Capital, Schroders, Hermes & CBRE Global Investors which highlights the growing investor interest in these markets.
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Investment by Lot Size* (No of Deals)
Source: Property Data *For the time period 2014-2018
- It is conceivable that we will see more speculative or design and build development in the region if the chronic supply crunch continues.
Savills acquired Cambridge Research Park on behalf of Royal London Investment Management
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