Newly released biannual research data from property consultants Bidwells, which focused on the offices and laboratories market in Cambridge, UK, has shown that demand and activity levels for Grade A space in the city remains high, driving up rental values as supply struggles to keep up.

Aerial view of Cambridge city centre   - Img: Cmglee
Take-up in the city and surrounding areas totalled 274,600sq ft across both the office and laboratories markets for the first half of the year, with the office sector accounting for 79% of this activity. While overall take-up in the city did actually fall below forecasted levels for the first six months of 2017, the research highlighted the fact that several new buildings recently placed on the market toward the end of the given period were snapped up incredibly quickly; a clear sign that demand remains strong.

Thanks to these new developments, supply did in fact increase in the first half of the year. However demand still far outstrips overall supply, resulting in 1.4million sq ft of requirements still not met within the city and surrounding areas. This combination of high demand and insufficient supply is having a noticeable effect on the markets, driving rental values up to their highest ever.

Will Heigham, partner and head of Office Agency at Bidwells, said of the data and its implications, “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 are new highs for the Cambridge market and show how office and laboratory space is being keenly sought by occupiers.”

The new high for prime office rental values constitutes a 62% rise on values for 2007, equating to an increase of 4.9% per annum over the given period. It seems evident that the city is in somewhat dire need of additional Grade A space, and current trends indicate that such developments would be a sound investment.

Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor as he continues to expand his horizons.
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