Market snapshot

Office Market Pulse Cambridge Q2 2014

After a record breaking year, it was always going to be difficult for Cambridge to maintain levels of activity in the market place. Q1 2014 delivered modest take-up coupled with the lowest level of availability in a decade and begged the question – could the occupational market keep pace with the unbridled investment attention the city has been garnering in recent times?

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In this issue:

Everything is up – including availability and development activity

  • Q2 has delivered impressive take-up of 149,507 sq ft taking the total for the year to 240,443 sq ft. This is 39% down on record Q2 take-up last year whilst on par with the city’s 10-year average; the remainder of 2014 has the potential to eclipse this as we are already aware of around 300,000 sq ft of deals which are in solicitors' hands.
  • The average transaction size so far this year is 6,165 sq ft which compares favourably against 5,216 sq ft this time last year.  
  • Over half of Q2 take-up has occurred in the Out of Town market with reliance on Technology, Media and Telecommunications (TMT) and Pharmaceutical occupiers; accounting for 75% of deals done.  
  • Following demand falling three consecutive quarters we have recorded a 34% uptick in demand coupled with a notable return to unrepresented occupiers coming to market.
  • Rental levels have continued to rise while tenant incentives have reduced marginally. Only 10% of space under construction remains available to occupiers.

Significant occupational transactions Q2 2014

Property Size  (sq ft) Landlord(s) Tenant Lease information
6 Westbrook, Milton Road, Cambridge 12,574 La Salle Investment Management Solarflare

5 year lease. Rent £23.60 per sq ft

100 Rustat House, Clifton Road, Cambridge

11,485 DTZ Investment Management ARM 3 year lease. £18.50 per sq ft

Discovery House, Vision Park

9,034 Turnstone Estates Internet Watch Foundation

10 year lease with TBO after 5. Rent £22.50 per sq ft

20 Station Road, Cambridge  5,807  Brookgate CB1 Business Centre  Lease until 2021. Rent £33 per sq ft

Availability market facing?

  • Despite strong take-up during Q2, availability has risen to 727,254 sq ft; an increase of 9%. Options for occupiers seeking over 20,000 sq ft remain extremely limited with only four existing buildings capable of accommodating this.
  • The average unit size available in 2013 was 5,517 sq ft which has now increased to 8,080 sq ft.
  • Grade A space has fallen 45% since the end of 2013 while available grade C space has spiralled by 81,638 sq ft indicating a continued trend in occupiers trading up in better quality space.

Investment update

Investment in the UK commercial property sector during the second quarter of 2014 totalled £11.9bn - a 10% increase on the first quarter of the year and 45% higher than in the corresponding period last year, our Q2 edition of UK Investment Transactions has found.

View our latest UK Investment Transactions (UKIT) report

How is 2014 shaping up?

Now that we have a good handle on how the market has performed in the first six months of 2014, experts from our Capital Markets, Office, Industrial and Logistics, and Retail teams look ahead at the prospects for the rest of the year in our Mid Year Market Review.

View our 2014 Mid Year Market Review

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