Property market offers opportunities for Cambridge businesses

The types of deal in the commercial property market which are being pushed through have changed dramatically over the past year.  It is a buyer’s market now, both in property purchases and re-financing, and lenders are grabbing opportunities to steal market share.

A key element in the strategy of any well-run business is their property portfolio.  Many Cambridge-based businesses see these difficult economic times as a real opportunity to strengthen their operational capability so that they are in the strongest possible position to take on new business when the market picks up again.  Some see this as the ideal time to switch from leasehold to freehold premises.

As one managing director of a local business in the clothing manufacturing sector told me, they have been keen to switch from leasehold to freehold premises for some time. “While it may suit other businesses to have managed premises, the demands of landlords and management companies can interfere with our manufacturing operations”.  They finally found a suitable freehold site and, thanks to the market downturn, they paid some £40,000 less than budgeted.  Another local business needs additional office and storage space because their current premises are tight.  In this case they have also decided to make the property work a little bit harder – some of the property has been invested in a pension fund for the directors of the company.

It may be obvious that it is a buyers’ market now with respect to property.  Less obvious, however, is that there are a significant amount of corporate re-financing transactions going on as some lenders are whole-heartedly grabbing the opportunity to steal market share.  I participated in a recent local Royal Bank of Scotland ‘think tank’ meeting with a number of their larger clients.  The aim of the meeting was to understand and meet the needs of Royal Bank of Scotland’s business clients in the current climate.  Banks such as RBS are not approaching the market with a broad brush as in past years, but rather they are focusing intensely on profitable companies with good track records – companies that have no problem with the tightening loan-to-value criteria because they are well-performing. 

Thus, the national\international economic climate is providing a flurry of opportunities in areas of the country, such as Cambridge, where business is still comparatively buoyant.  As well as being able to take advantage of the current property market, smart businesses are focusing on re-financing deals and banks are falling over themselves to take market share in this and other affluent pockets of the country.

For further information contact Michael Denmead .

The information given in this article is of a general nature only and should not be considered as advice applicable to any particular situation for which specific request should be made to us.

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