Innovation clusters continue to woo investors in property
This month we’ve been networking – having hosted the national launch of our Commercial Edge research series from our head office on London’s Oxford Street as well as launching our regional Cambridge report from Churchill College’s Møller Centre.
The reports provide a comprehensive update on commercial property activity across the key regions we operate in.
Our guests in London, including clients and colleagues from across our UK network, were treated to a lively discussion chaired by Stian Westlake, policy adviser to the Minister of State for Universities, Science, Research and Innovation, whilst in Cambridge we were joined on stage by Aviva Investors’ head of UK research, Tom Goodwin.
The conversation at both events largely focused on investment decisions and the main drivers behind the market. A key take-away from each launch is the value that decision-makers and investors continue to place on business clusters when forming strategy decisions and the importance of nurturing a knowledge-based economy.
Whilst perhaps many areas of the country boast that they cultivate these environments, as we know Cambridgeshire – like our friends in Oxford – is ahead of the curve and the Cambridge office and lab market widely benefitted from this in 2017. Last year, despite no ‘super-deals’ taking place, over 696,000 sq ft was transacted, up from 662,357 sq ft in 2016.
As the chair of our panel in London highlighted, the Government’s Industrial Strategy, which sets out a long-term plan to boost the productivity and earning power of people throughout the UK, confirms its commitment to supporting such areas of innovation.
Additionally, the Chancellor’s pledge in the Autumn Budget to create vital road and rail links across the area through East West Rail and the Oxford-Cambridge Expressway, and proposed new stations at Cambridge South and Cowley, is further recognition of confidence in the region’s future success.
Of course, the generation of these types of commercial hubs cannot be forced, but with the right support the advantages in developing these clusters has great economic potential.
Cambridge’s ranking as 1st in the Fastest Growing City table is a testament to this, and though the region’s commercial property investment activity was relatively static last year – with just under £100 million of deals completing in 2017 – this was mainly due to a shortage of supply rather than demand.
Cambridgeshire remains an attractive destination to investors, as Tom Goodwin from Aviva highlighted; the company is investing heavily in the city, creating large amounts of space around the main station.
This investment is partly driven by government endorsement as well as the city’s strong central and out-of-town office markets. This latter factor, almost a Cambridge anomaly, was discussed at our launch.
For investors, the Cambridge out-of-town market is more than just a ‘release valve’ for when the city centre market gets too hot; instead they actively want to invest in the region’s science and business parks on the peripherals of Cambridge, as much as offices in the centre.
Most importantly, investors are driven to the region for its reputation as a world-class centre of excellence in the science and technology fields. For this of course we owe much to our academic institutions, which play an integral role in feeding and nurturing activity, as well as the businesses which choose to locate here.
And other clusters of activity are evolving around regional innovations. Silverstone Park, in Northamptonshire has developed around the world renowned Silverstone Circuit.
Our teams have recently been appointed as regional agent on the scheme and it is extremely exciting to be working on another significant regional project with ambitious plans to create new offshoots.
In addition to the obvious draw for motorsports related occupiers, the Park is gathering pace with new development underway and further planned resulting in take-up from a wider scope of occupiers such as high-tech engineering.
Whilst Cambridge continues to harness its reputation, it must also look to safeguard its prospects for future investment. In the current climate it is more important than ever for academic institutions, businesses, investors and developers to work together to maintain our business hubs and to support growth.
And those of us in the property industry can help – we need to think beyond bricks and mortar, taking a more flexible approach to property decisions. After all, the success of a business cluster is dependent on people making connections and forging new relationship and for that, flexibility is key.