Bidwells summer 2021 Cambridgeshire report reveals that office and laboratory space in Cambridge has had intense investor interest over the past two years, with prime office space rent rising by 37 per cent over the past five years.
Laboratory space in the city continues to be more in demand, whilst availability tightens, with availability at a low of 2.8 per cent, the lowest figure in seven years, and is expected to remain at this in the near future. At the end of the first half of this year, there was 82,000 sq. ft of space on the market, with all bar 9,800 sq. ft under offer at the end of June.
Meanwhile, occupier demand has moved to its highest level in six years, for both office and laboratory space, with numerous larger requirements entering the market. Overall demand at the end of H1 was 1.7 million sq. ft, an increase of 30 per cent since the end of 2020, and 45 per cent above levels seen in mid-2020. Many new entrants are seeking larger spaces, typically above 50,000 sq. ft.
The extreme imbalance currently seen in the market is set to cause Grade A office space rents to hit £50 per sq. ft by the end of the year in the city centre, with laboratory rents not far behind.
Phase two of the expansion of Cambridge Biomedical Campus is also underway, set to deliver a 103,000 sq. ft laboratory building at 1000 Discovery Drive, following planning approval, whilst helping to meet increased demand. The building will be adjacent to the 100,000 sq. ft Abcam building, the second building in the expansion, which also holds outline planning for a total of 400,000 sq. ft.
Phase one of the redevelopment of The Old Swiss laundry site on Cherry Hinton Road has already secured its first two lettings, totalling 18,038 sq. ft, which were agreed in the first half of this year, prior to practical completion. Hewlett Packard secured 12,560 sq. ft of the take-up, adding to the emerging technology cluster in that area, which emerged around the CB1 development by the railway station, causing an acceleration in investor demand. A further 30,000 sq. ft of speculative space is also set to be delivered in the first half of next year.
Investment activity in the Cambridge office and laboratory market has accelerated sharply in 2021, with a total of £314 million of transactions completing, compared to £221 million in the whole of 2020.
The full report, complete with all facts and data can be found via Bidwells.
Image source- Bidwells
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