Market snapshot

Office Market Pulse Cambridge Q2 2013

The well-publicised decision of AstraZeneca to co-locate elements of the business in an 11 acre site at the Cambridge BioMedical campus emboldens an already soaring market place. Though our Q2 office market statistics omit this pending transaction, 2013 take-up is currently at its highest level in the last five years.

As the Cambridge office market goes from strength to strength, recent headlines undoubtedly make for good reading. But is the devil in the detail?

You can download a PDF version of this Cambridge Office Market Pulse, or to read and sign-up to receive Office Market Pulses from other UK centres, click here.

In this issue:

Cambridge take-up at its highest level in five years

  • Excluding the AstraZeneca transaction, 2013 take-up to date has already eclipsed the total annual take-up seen in 2009 and 2010.
  • By Q2, we have recorded transactions amounting to 365,000 sq ft with a further 130,000 sq ft under offer. Conservative projections suggest total take-up for 2013 will exceed 700,000 sq ft.
  • 2011 provided for the second highest level of annual take-up since records began (655,000 sq ft). At the Q2 stage, take-up stood at 289,000 sq ft.

For a breakdown of take-up, click here.

Significant occupational transactions Q2 2013

Property Size  (sq ft) Landlord(s) Tenant Lease information
Twenty Two Station Road, Cambridge 44,150  Brookgate (funding to be agreed) Birketts LLP 

20 year lease with a break option after year 15
£33.00 per sq ft

Pembroke Building 13,315 Aviva Investors Illumina Confidential
Building 7,400, Cambridge Research Park 9,500 Mountgrange Kier

6 year lease with break option after years 2 and 3
£18.00 per sq ft

Office availability increases by 9%

  • Availability in the Cambridge office market grew from 943,000 sq ft to 1,044,000 sq ft between Q1 and Q2 2013.
  • Town centre space increased by 6.5% and by 9% in the out of town market, while Science Park supply reduced by 11%.
  • While grade B supply remained static, grade A supply fell sharply by 27%.
  • So is the devil in the detail? With a 41% increase in grade C stock – the highest level since Q2 2011 when a spate of refurbishment activity was commissioned - landlords who upgrade office space to satisfy occupier demand for prime stock will have the detail covered and ensure they capitalise on increasing rentals.

For a breakdown of supply, click here.

Region sees upturn in investment activity

In the last quarter we have seen a clear shift in sentiment towards regional offices. While the focus of institutional investors remains largely with the 'Big 4,' there has also been an upturn in activity within the wider regional market from property companies and private investors. Recent transactions of note include:

  • 84 Colmore Row, Birmingham- £11.00m (5.8%)
  • Tungsten Building, Blythe Valley- £6.26m (6.94%)
  • Iceni Centre, Warwick- £10.85m (10.6%)
  • Worldwide House, Peterborough- £16.00m (12.70%)

To view our latest UK Investment Transactions (UKIT) report, please click here

Regions

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