recently Greece; and high yields for landlords enjoying a healthy rental market. Is this another story about prime
I
central London? No. This is Cambridge, the academic and scientific powerhouse rivalling the capital for development and global appeal. And the overseas investors have been pouring into the city. You only need to look at Berkeley’s Cambridge Riverside, a high-spec scheme of studios, apartments and townhouses beside the Cam to judge this. “It’s one of the few developments outside central London where we knew we could win significant international investment in 2012,” says Savills’ new homes director Dominic Grace. His firm sold units off-plan in Singapore, Kuala Lumpur, Bangkok and Hong Kong at prices reported to approach £600 per sq ft. By contrast, the average central Cambridge price is about £400 per sq ft, according to Savills. Other unusual developments demonstrate the unusual appeal of the city. Grosvenor Estate made an exception to its policy of operating in London and rural estates only, to build 99 flats priced up to £1.2m each in Cambridge’s Parkside Place right in the centre of the city – they all sold off-plan last year, many reportedly to overseas investors. This international
profile is the culmination of a process that began eight years ago when Highland Homes built the 137-unit Belvedere development, the first in Cambridge with a specification high enough to include concierge service. “Back then it was almost all Irish investment clubs doing the bulk buying with a rare scattering of Middle East interest. Now it’s the reverse with a lot of eastern funds involved,” says David Bentley, head of new homes at east of England estate agency Bidwells, which claims to handle 60% of the new-build schemes in Cambridge. He says the city’s ability to
attract this kind of funding – “it’s because Cambridge isn’t a location, it’s a global brand” – has lifted the scale and quality of schemes being built. “Prime schemes can get 6% annual rental yield and, over three years or so, 17% capital appreciation. Investors want more of the same so they tend to insist on prime locations and prime specifications,” says
nvestment fund interest from the Far and Middle East; international sales roadshows; plenty of individual high-net-worth purchasers from Singapore, Malaysia, Russia, the US and most
“Even for funds it
can be the personal elements that
seal the decision – someone has a
child at Cambridge University”
Bentley. Although there is an occasional international
interest in the wider eastern region – some Far Eastern investors are believed to be involved in the 3,500-home Lincolnshire Lakes project, for example – almost all of the investment spotlight is firmly on Cambridge, at least partly because of its widely-regarded educational and research institutions. And in this city, unlike most academic hubs elsewhere in the UK, student and mainstream residential schemes are
23 February 2013
closely intertwined. Most of the 18,500
students at Cambridge University stay in halls for their
entire three- or four-year courses – and with the university expanding, so there is a need for new halls. Meanwhile, Anglia Ruskin, a less well known institution, which has one of its four main East of England campus sites in Cambridge, has only 13% of its total 31,000 pupils in halls; this allows ample growth potential for investors. “There’s plenty of overseas money
interested in this location. Even for funds it can be the personal elements that seal the decision – someone has a child at Cambridge University so they want to invest there with its big growth potential,” says Richard Taylerson of Jones Lang LaSalle’s higher education team, which advises investment funds. That potential includes a £1bn
development north-west of the city on a 150-hectare site owned by Cambridge University. Outline consent was secured late last year for 1,500 homes for key academic staff, accommodation for 2,000