2011 saw available stock of industrial floor space across Cambridge and the sub region reduce from 2,275,020 sq ft to 1,839,365 sq ft as a consequence of occupational demand and increased levels of demolition for obsolete accommodation. Second-hand stock dominated available space on the market, accounting for 89% at the end of the year.
Second-hand stock dominates market
There is currently only 85,551 sq ft of new space available. This consists of 26 units predominantly within Glenmore Business Park, Waterbeach and Shire Hill Industrial Estate, Saffron Walden. Take-up to the end of 2011 amounted to 529,921 sq ft of which 214,229 sq ft was transacted during the course of the second quarter. The majority of new space taken up during 2011 was in the first two quarters of the year totalling 66,779 sq ft. This was mainly due to the letting of Titan, Space Ten at Papworth and various disposals at Buckingway Business Park, Swavesey.
Limited options for occupiers seeking new and refurbished units
Transactions for new and refurbished units accounted for 30.5% of total take-up. This highlights occupiers increasing requirements for good quality accommodation in prime locations. The availability of new and refurbished units only accounts for 11% of total available stock leaving limited options; occupiers are therefore widening their search as a consequence.
Significant opportunities with refurbishment of second-hand stock
Alternative options available to property owners include comprehensive refurbishment of second hand units to bring the accommodation in line with occupier requirements. This provides the opportunity for property owners to achieve improved lease terms and higher rents. Occupiers on the other hand, have the benefit of an improved product at a rental level below what they would pay for a design and build solution.
We have seen the benefit of this approach with the extensive refurbishment programme undertaken at Units 2-5 Bar Hill Trading Estate. The works included new cladding, electric loading doors, internal decoration and replacement and repair of roofs.
Occupiers seeking modern units may need to widen their search
The majority of take-up in Cambridge and the sub region focused on smaller units in line with previous years. A total of 83 transactions were completed during 2011 of which 68% were for units of 5,000 sq ft or less. We envisage this trend will continue throughout 2012 and occupiers with larger requirements for modern units will have no alternative other than to consider a design and build solution or widen the search area to satisfy their property requirement.