Office market take-up exceeded 500,000 sq ft for the fourth successive year in 2016 and prime rental values are at a record high of £37/sq ft. Office supply has fallen to the lowest level for 15 years and availability rates are down to just 8.5%, while requirements continued to soar to 1.1m sq ft, according to the spring 2017 report.
The Cambridge laboratories sector recorded its second-highest-ever annual take-up figure of 288,000 sq ft for 2016. It has grown by more than 500,000 sq ft (41%) over the past five years, and this will increase by a further 500,000 sq ft when the AstraZeneca Campus is completed in 2018-19. Prime headline laboratory rents stood at £33/sq ft at the end of 2016.
New development, such as the 160,000 sq ft mixed-use scheme at Brookgate’s CB1, 50/60 Station Road, is a sign of ongoing confidence, says Will Heigham, head of office and R&D at Bidwells in Cambridge. “It is one of just a number of good-news indicators for Cambridge that have been announced in recent months.
“Improvements to our transport networks will also have a positive impact, including the government announcement that it plans to re-open the Varsity Line rail link from Oxford to Cambridge. This is a vital link for the two cities, which are cornerstones of the Golden Triangle. In addition, the opening of the new Cambridge North railway station in May will provide a welcome gateway for businesses, especially those based in the city’s northern cluster.”
In the industrial market, supply hit its lowest level on record and the scarcity of grade-A availability helped push prime rents up to £11/sq ft, up 7.3% on 2015. The major issue is supply, which has fallen to just 5% of total stock, of which 51% is rated as poor quality.
“The lack of quality space is becoming the predominant issue for occupiers,” says Russell Catley, head of the industrial agency at Bidwells in Cambridge. “Demand remains robust and the market has been largely unaffected by the sentiment following the referendum. Looking forward to the rest of 2017, we do expect an increase in pre-lets and pre-sales and we are seeing some limited speculative developments starting to take shape outside the city.”
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