Market snapshot

Office Market Pulse Cambridge Q4 2013

The Cambridge office market went from strength to strength in 2013, finishing the year with a record annual take-up level of 820,394 sq ft and a new headline rent of £33.00 per sq ft.

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:

Record annual office take-up in Cambridge

  • Q4 office take-up totalled 197,850 sq ft culminating in a record annual take-up of 820,394 sq ft.
  • Science Park accommodation accounted for 36% (295,614 sq ft) of total take-up for 2013 compared to103,896 sq ft in 2012 – a rise of 184%.
  • Technology, Media and Telecommunications (TMT) and Pharmaceutical occupiers are driving continued growth in the Cambridge office market. Comprising a long-term average of 50% of take-up, it is unsurprising that this market dominance rose to 66% during 2013.
  • After witnessing a spike in requirements towards the end of 2012 and into 2013, there is now 40% less registered demand for office space compared to this time last year. Noticeably, 54% of requirements are now agent-led as it becomes increasingly challenging for occupiers to source suitable options.

For a breakdown of Q4 take-up, click here. To view an annual comparison of take-up by grade, click here.

Significant occupational transactions Q4 2013

Property Size  (sq ft) Landlord(s) Tenant Lease information
Robinson Laboratory
Chesterford Research Park
60,000 Aviva Biofocus 

Pre-letting of laboratory building - confidential terms

310 Cambridge Science Park 55,725 Trinity College AstraZenica 5 year lease with break after year 3
£24.50 per sq ft
Unit 296
Cambridge Science Park
16,000 CBRE Global Investors Xaar

5 year lease
£22.50 per sq ft

Lowest office availability since 2001

  • As a direct consequence of record take-up during 2013, availability of office space has reduced to 667,610 sq ft from over 1m sq ft at the end of 2012 – a fall of 38%. This is the lowest level since 2001.
  • Unlike 2001 however, there is no speculative construction taking place promising to deliver large amounts of grade A stock.
  • Occupiers are therefore faced with severe difficulties in finding suitable options for expansion or downsizing. As a consequence, rental levels are likely to increase and incentive packages reduce.

For a breakdown of Q4 supply, click here. To view an annual comparison of supply by grade, click here.

Commercial property investment emerges from recession

Our Q4 UK Investment Transactions report reveals that the UK commercial property sector had a stellar end to 2013, with investment at levels that we haven’t seen since before the global financial crisis. The quarterly investment figure of £17.01bn and the 2013 annual investment total of £44.94bn are both the highest the market has seen since 2007.

There was a 60% increase in regional investment in 2013 and Cambridge has been the standout choice for investment in secondary office markets. The recent sale of four buildings at Vision Park - reflecting a net initial yield of around 6% - demonstrates this sentiment.

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

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