Growing demand in university town for both property sales and long-term rentals
Booming: Demand for residential and commercial property has increased the size of Cambridge, with the addition of high-end developments in the city centre, infrastructure projects and two new suburbs. - PHOTO: BLOOMBERG
[CAMBRIDGE, England] Cambridge is famous for its university, but it has also become known for global investment in recent years.
Demand for residential and commercial property has increased the size of Cambridge, with the addition of high-end developments in the city centre, infrastructure projects and two new suburbs.
Much of the growth stems from the university. It is a draw for wealthy international students, who often remain in the area after graduation, creating a demand for both property sales and long-term rentals.
Since the late 1990s, the region has also become a technology hub, with Cambridge becoming known as Silicon Fen, a reference to the area's flat, waterway- crossed landscape. This high-technology area, which has attracted companies like Toshiba, Microsoft and Autonomy, has evolved along with the city's reputation for medical research and practice.
Overall, the city's population, now about 125,000, is projected to grow 21 per cent in the next 10 years.
Housing demand has pushed up prices. The Land Registry reported that from January to September, prices for Cambridge property increased 5.6 per cent, with freestanding houses rising 15.5 per cent and apartments 6.6 per cent.
With residences selling for £1 million (S$2 million), price growth in Cambridge is outpacing the rest of Britain everywhere except in central London, which is about 80 kilometres southeast.
"Cambridge is booming, but there hasn't been the level of development to keep up with demand from both domestic and international markets," said Toby Greenhow, sales director for the local office of real estate agency Savills. "The few prime projects available sell quickly for high prices."
Prime properties tend to start from about £250,000 for a studio or one-bedroom apartment, measuring around 540 square feet. Two-bedroom properties can cost £350,000, with two- to three-bedroom penthouses or duplexes ranging from £500,000 to about £1 million, depending on location, facilities and interior finishing.
By comparison, in Oxford, prices for one-bedroom apartments in higher-end new developments start at around £230,000 and three-bedroom units in prime locations at about £750,000.
There is a large supply of single-family dwellings and conversions, much of it dating to the 19th or 20th centuries, priced from £250,000 for small one- and two-bedroom homes to £1 million and more for older freestanding properties, known in the real estate industry as "character homes".
But there is a shortage of new residential units in Oxford, particularly in the luxury investment sector, and restricted development opportunities in and around the city centre.
Like Oxford, much of the property in and around Cambridge had not, until recently, catered to high-end international investors. The city has a large number of homes aimed at domestic buyers, like character village properties, sales of which are declining as people try to live nearer Cambridge's centre.
International investors want upscale, central locations with luxury fittings and concierge services, said Mr Greenhow, the Savills sales director.
"Buyers from overseas, especially those from China and Southeast Asia, want new property," he said. "They aren't generally interested in historic homes, particularly if they are buying for investment."
The bar for investment property was raised recently by The Marque, a 10-story luxury development that is Cambridge's tallest residential building. The development, which was introduced in late October and is listed with Savills, has sold 28 of its 92 units, and 2 are reserved, with prices starting at £250,000 for one- bedroom units.
The three-floor penthouse, priced at £1.3 million, was immediately sold to a Chinese investor who then resold it to a British buyer.
The Marque, on a corner plot of land, has easy access to the city centre, and railway and road links to London. It is marketed as offering concierge services, a private gym and landscaped gardens, with the contemporary flair that investors used to London, Dubai or Singapore might expect.
"We are seeing a mix of buyers, including executives of multinationals and entrepreneurs who want to own for long-term investment because they are aware of the growth of the city's business and technology sectors," Mr. Greenhow said. "Others are buying for children who are students. Plus, Cambridge is a 40-minute rail commute to London, so there is still a core market of owners who live here but work in the capital."
Prices of new properties in the city centre range from £235,000 to around £1 million. Among them, and also listed with Savills, are Riverside, which has sold all but 18 of its 195 apartments, and Kaleidoscope, which comprises 408 units.
Real estate agency Bidwells has listed Ceres, which has 160 apartments and is near the rail station; and Botanic House, which is named for its view of the city's botanic gardens and is to be introduced next year.
"We have had increasing interest from buyers looking to move their funds to Cambridge from the Middle East, Russia and Eastern Europe, plus Greece and Italy," said David Bentley, a partner at Bidwells. "But because of the historic nature of the city, there is still a constrained supply of new-build in the centre. Russian buyers, however, are more interested in niche suburban developments of five- or six-bedroom executive homes. We have taken several instructions recently on homes worth over £2 million."
Mr Bentley said prices in Cambridge have tripled in the past 15 years. New high-end apartments in central locations now rent for £1,200-1,400 per month.
Almost the entire city centre is historic and cannot be developed, or is owned by the university, which never sells its holdings. As Cambridge grows, however, the city is adapting.
The area around the main rail station is being regenerated, new roads have been built, and a second rail station is to be built to the city's northeast. An innovative electric bus, run on former railroad lines, began service to the city centre and suburbs in October.
The new suburbs - Trumpington, south of the city, and another yet to be named, to the northwest - are to have more than 6,000 housing units to meet the demand that is expected to follow additional jobs.
Building is at various stages, with some projects, like Seven Acres, already under development and selling at £235,000 for a one-bedroom apartment to £745,000 for a four-bedroom house.
Mr Greenhow said that the majority of new residential development in the city centre would be released through the next 12 months but that there was little in the pipeline long- term. Once current stock is sold, buyer interest will, by necessity, then have to focus on the suburban areas. - IHT