Almost 80 million sq ft of new commercial space will be needed within the Oxford-Cambridge Arc if the required infrastructure is delivered, according to Savills.
Savills’ new report on the Arc says around 69 million sq ft of warehouse and almost 10 million sq ft of office and R&D space will be needed for the growth across the region where 1.1 million new jobs could be created by 2050.
The report notes that at present Oxford and Cambridge are the driving forces of the Arc but says new infrastructure could draw significant investment to the central areas such as around Bedford and Milton Keynes. A new university is due to open in Milton Keynes in 2023.
Growth sectors such as pharmaceutical, cybersecurity, automotive and biotechnology are key.
Steve Lang, director in the Savills research team, said: “An increase in overall investment into the tech and life science sectors within the Arc is a strong indication of potential future real estate requirements.
“What’s clear is that there is a need for choice in terms of scale, price points and location when it comes to commercial space in order to facilitate this growth within the region and to ensure the UK remains attractive to global businesses.”
Savills’ research shows that, so far in 2019, the region has seen rapidly increasing levels of funding compared to 2018 but says neither city has risen in global rankings of technology clusters in recent years.
Mr Lang added: “It is clear for the life science cluster in the Arc region to compete internationally there needs to be greater collaboration between major centres.
“From an affordability perspective, prime office rents in Cambridge and Oxford are considerably lower than its American counterparts in Boston for instance.
“Therefore, there needs to be a conscious decision from developers and investors to price office and laboratory space appropriately if the cluster is to continue to expand and thrive whilst allowing for sensible rental growth.”
The report is available here.
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