Take-up of industrial stock in the first six months of 2014 in Cambridge has soared – surpassing total annual take-up for the last two years.
LSH’s Cambridge Industrial and Logistics Market Review reveals that in the city and surrounding areas 917,201 sq ft was let or sold between January and June 2014, compared with 892,327 sq ft in the whole of 2012 and 637,267 sq ft last year.
Nick Thompson, Surveyor at LSH’s Cambridge office, said the 374% increase on take-up on the same period in 2013 came from just eight more deals, including four mid-box units of 50,000 to 99,999 sq ft and one big box transaction.
The largest transaction was the sale of the 275,000 sq ft CDC building and 48,250 sq ft Vision Centre at the Spicers site, Sawston to an undisclosed buyer in the second quarter.
However, demand for units under 10,000 sq ft accounted for 75% of all transactions in the first six months of the year.
“The increase in transactions already taking place this year has led to a 27% decrease in supply in the area,” he said. “Secondary stock is dominating the market and because there is limited supply of prime stock we have seen two speculative developments at Evolution Business Park and Newmarket Business Park under way.”
There are now 158 units available in the area – down from 175 at the end of 2013 – with just four units of 25,000 sq ft or more.
Second-hand stock accounts for 86% of existing supply, 79% of which is less than 10,000 sq ft.
“I expect headline and prime rents for good quality secondary stock to remain stable and because of the lack of supply, landlords will offer fewer incentives,” said Nick. “This puts landlords in a stronger position than they have enjoyed in a while.”