One of the UK’s leading property consultancies has just released new data on the offices and laboratories market in Cambridge, which shows that demand and activity levels for Grade A accommodation in the city and surrounding area remains strong despite shortage of supply.
Bidwells’ half-yearly research highlights that several new buildings put onto the market recently have been snapped up quickly, with the majority of the new space going under offer at the end of the period.
This marks a positive development after figures show that take-up in the first half of 2017 fell below forecasted levels.
Take-up was 274,600 sq ft across both the office and laboratories markets, with the office sector accounting for 79% of total activity completing in the first six months of the year.
Whilst take-up has remained strong over the past four to five years, the level of demand for space has outstripped supply, as shown by more than 1.4m sq ft of requirements still not met.
Supply increased slightly in the first half of the year, due primarily to the release of several new developments but these schemes have been quickly acquired by businesses looking to either gain a foothold, or increase their presence within the booming Cambridge economy.
Will Heigham, Partner, Head of Office Agency at Bidwells said:
Given the quick letting of new space when released onto the market, we expect the supply conditions in both the office and labs markets to tighten in the second half of the year, as the market remains active.
With the strong demand for space continuing and supply remaining tight, rental values have continued to edge upwards and the past six months has seen a continuation of this trend. Prime office rents now stand at £38 per sq ft and prime open plan laboratory rents at £33.50 per sq ft. Both of these rents are new highs for the Cambridge market and they show how office and laboratory space is being keenly sought by occupiers.
Prime office rents are now almost 62% higher than they were in 2007, which represents an increase of 4.9% per annum over this period. The increase in laboratory rents has also been impressive but over a shorter period, with values rising by 5.5% per annum over the past three years.