Since 2009, rents for the best commercial space in Cambridge have surged by £12/sq ft, which is twice the growth in any other UK city outside London. As a result, they now stand above all other regional cities at £37/sq ft.
Rental growth is being fuelled by high demand for office space. Average annual take-up over the past three years stands at 620,000 sq ft, which is 59% above the 10-year average of 390,000 sq ft.
This reflects the strength of Cambridge’s economy and its SME sector in particular. Savills calculates that Cambridge has attracted 37% more venture capital investment per capita over the past five years than Boston, its nearest global competitor.
The rapid growth in office rents since the financial crisis has driven high levels of investment activity. Over the past five years, Cambridge office values have increased by 51%.
Residential property values have also soared as the growth of the local economy has drawn workers to the city.
Savills’ residential research analyst Gaby Day says affordability is now a big issue and that “people struggle to live close to where they work”.
omes in central Cambridge are priced at £630/sq ft, which is equivalent to values in London zone 2 locations such as Brixton. Median house prices in the city are 13.5 times more than median earnings.
“Both the city and its hinterland needs to continue to provide high rates of housing delivery and a range of price points, particularly as housing affordability becomes increasingly stretched,” says David Henry, head of planning in Cambridge at Savills. “Continued economic growth will be hindered if employees of all sectors are priced out of the area.”
With much of the planned new housing located outside the city, government has a key role to play in ensuring that infrastructure is provided in a timely fashion, Henry adds.