Cambridge’s office market remains one of the UK’s hot spots with record rental levels, increased demand – particularly for science park space – and the second highest Q1 take-up recorded in the last 10 years.
The city’s office market is buoyant and continues to buck the downward trend experienced in many other major cities.
Q1 results reveal record take-up and rental level
Q4 was the highest performing quarter in 2012, returning a total take-up of 136,327 sq ft of office space.
Our Q1 review of the Cambridge office market sees this success continue into Q1 2013 with take-up reaching 171,994 sq ft; the second highest Q1 take-up figure over the past 10 years.
A new rental level record was achieved at Twenty Two Station Road, CB1, with the pre-letting of 44,150 sq ft to Mott McDonald at £32.50 per sq ft.
Duncan Quig, Associate Director in our Office Agency team, said the level of activity in the Cambridge office market clearly demonstrates its reputation as a hot spot and shows no signs of cooling.
“For the first time in eight consecutive quarters, tenant activity was led by the professional services sector, accounting for 40% of take-up. Take-up by the technology, media and telecommunications (TMT) and pharmaceutical sectors amounted to 39% of Q1 take-up,” he said.
“Demand levels increased significantly due, primarily, to AstraZeneca’s requirement for a new 650,000 sq ft HQ research and development campus.
Out of town market witnesses lion's share of take-up
Meanwhile, availability in the Cambridge office market fell by 12.3% to 943,003 sq ft, reflecting the lowest level since 2011, and the out of town market witnessed the lion’s share of take-up accounting for 58% or 76,625 sq ft.”
Much-needed grade A space on horizon for city centre
Grade A availability fell by 8.7% to 238,388 sq ft with only 17,106 sq ft available in the city centre. However, the wholesale refurbishment of 90 Hills Road is due to reach practical completion imminently and will provide a much-needed 9,030 sq ft of grade A space in the city centre.
Total UK investment in Q1 2013 rose by 8% in comparison to the previous quarter, reaching £8.05bn. The average deal size reached a new high of £28million. This activity was despite investment in central London offices falling by 25% in Q1 2013.
Duncan added: “We expect the Cambridge office market to demonstrate continued growth in take-up and improvement in rental terms over the next 12 months”