Industrial Market Review

Cambridge industrial and logistics market review

The Cambridge industrial market has seen a strong start to the year with take-up to date surpassing total annual take-up for the last two years. Consequently, supply has significantly decreased and remains dominated with secondary stock.

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In this issue:

Half-year industrial take-up at record level

  • Take-up in Cambridge and the surrounding area at the half-year stage was 917,201 sq ft, exceeding total annual take-up seen in 2012 and 2013 - 892,327 sq ft and 637,267 sq ft respectively.
  • This represents a staggering 374% increase on take-up recorded at the half-year stage last year – although it is an increase of just eight more deals.
  • The surge in take-up is a consequence of four mid-box units being let in the 50,000 – 99,999 sq ft size bracket and one big box transaction.
  • The largest transaction was the sale of the CDC building (275,000 sq ft) and Vision Centre at the Spicers site, Sawston (48,250 sq ft) to a confidential buyer during Q2. 
  • Demand for units of less than 10,000 sq ft accounted for 75% of transactions.

For a breakdown of Cambridge industrial take-up by size click here, or to view take-up by grade, click here.

Secondary stock dominates market

  • As a result of recent large transactions, supply in Cambridge and the surrounding area has decreased by 27% to 1,040.094 sq ft (as at the end of Q2).
  • The total number of units has reduced by 10% to 158, compared to 175 at the end of 2013.
  • There now remain just four units larger than 25,000 sq ft.
  • Second-hand stock accounts for 86% of current supply, and 79% of this stock is made up of units of less than 10,000 sq ft.
  • The limited supply of prime stock has been the catalyst for the speculative development of two units totalling 29,677 sq ft - the first, Evolution Business Park and the second, at Newmarket Business Park.

For a breakdown of Cambridge industrial supply by size click here, or to view supply by grade, click here.

What does the future have in store?

  • Prime rents and headline rents for good secondary stock will remain stable with fewer incentives offered due to lack of supply.
  • Refurbishment of poor secondary stock to capitalise on the short supply of good stock.
  • We expect further speculative development to be less dependent on pre-lets.

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