You get more bang for your buck in Cambridge office space market
According to research from our data team, office occupiers who spend three quarters of a million pounds a year on office space in Cambridge can afford more than three times the amount of space than in London’s West End.
£750k a year is the typical amount of rent paid by medium-sized businesses with a turnover of around £5-10 million in London and the South East. This annual sum secures just 6,000 sq ft in Mayfair, compared to 20,548 sq ft in Cambridge, ranked ninth out of 24 office hub locations in terms of affordability.
In London, sky high rents and lack of the right kind of space is increasingly causing businesses to question the need to retain all their functions in the capital, and our city undoubtedly benefits from this.
However, in our list of 24 office hub locations there are a number which are in fact closer to London, such as Reading and Watford, where businesses could get even more bang for their buck than in Cambridge: highlighting that simply finding good value space isn’t enough.
In Reading, businesses could obtain 20,833 sq ft for the same amount and in Watford they could rent 27,273 sq ft.
I would suggest then that what our list really highlights is the value for money that Cambridge provides business. It’s not the cheapest option but – let’s face it – the best option rarely is.
That’s because, as I keep saying, achieving the right space for a business requires much more than just renting a floor and four walls. A number of factors should be taken into account including staff retention/attraction, infrastructure and the location itself in terms of proximity to and for clients and, quite simply, whether it’s a nice place to spend the best part of your day. For many is seems that Cambridge, at the moment, is hitting the sweet spot.
Yes, cheaper space can be found elsewhere, but these locations can rarely challenge the ready-made talent pool that is found in the city. Cambridge’s business and science parks, and increasingly its city centre, attract both locally grown and global science, technology and commercial businesses, keen to tap into the exceptional wealth of talent that we have in the county. Established park occupiers on the periphery of the city complement businesses in the centre that are looking for a different type of space in the heart of a bustling and beautiful city. Luckily in Cambridge we can provide for both. The key however is to ensure that we can continue to do this while evolving with a changing business environment.
Over the last 10 years, ways of working have changed dramatically. In London, operators have responded to landlords by providing co-working space, which is now a firmly established trend in the capital.
This type of operation is predicted to take-off in Cambridge and should help attract other types of occupiers, such as small start-ups, to the city. While this is a ringing endorsement and will benefit the city, the worry is accommodating them.
There are a number of new development sites being brought forward, such as on Station Road, but there is a finite amount of space. As we all know, a lack of quality stock combined with high demand will often put an upward pressure on rents.
While this may benefit landlords, outpricing occupiers is rarely good for business hubs, particularly those like ours which thrives on its eclectic mix of businesses. In fact, when we come to review our list of locations and office affordability in 10 years’ time, I hope Cambridge is still providing exceptional value for money. How we achieve this, however, is the real question.