Cambridge tech talent drives record office rents as London dominance slips
The talent on tap in Cambridge’s science & technology cluster has driven prime office rents in the city to a record of £41 per sq ft and is forcing companies and investors to look at this region afresh as a preferred property base to London.
The shift in priorities away from the capital is highlighted in a new survey from Bidwells which shows that office rents in Cambridge have hit the new pinnacle four years ahead of forecasts.
There’s more to come: Bidwells is now predicting a top line figure of £44 per sq ft by 2023.
Research director Sue Foxley believes Cambridge is now emerging as a “core market” in the same way London sub-markets have in the last decade. She said: “The restructuring of the financial sector in the late 80s and 90s set the tone for the City and latterly Docklands office market for years to come.
“In more recent years we have seen a shift to other high growth industries, with sharp rental increases being seen in areas such as Shoreditch.
“Cambridge is seeing the same dynamic, driven by its pronounced exposure to the emergence of the UK’s leading science and technology companies. Geography is increasingly irrelevant.
“The longstanding delineation of London, the South East and other regional markets is becoming outdated in the evolving economic landscape.”
Research undertaken recently for business and academic member group Cambridge Ahead by the Centre for Business Research showed a sharp increase in business growth over the last 12 months, with global turnover expanding 14.4 per cent and global employment growth of 9.2 per cent.
Foxley added: “This recent expansion of turnover ahead of employment suggests productivity gains, allowing companies to compete for high skilled staff and push business space affordability limits, resulting in the £40 psf rent milestone being breached.”
Bidwells’ research also found a prime office rents upturn of 7.9 per cent over the last year, reaching levels previously not expected until 2022.
Will Heigham, partner and head of office agency at Bidwells, said: “Rents in the city and its surrounding prime parks are now well ahead of other regional UK office centres and we expect them to continue growing with the city’s ongoing success.
“The emergence of Cambridge’s world-class knowledge economy cluster, supported by an internationally renowned university, is allowing the high-growth companies located here to compete more strongly than ever for the top talent and best business space. We now see rents reaching £44 per sq ft by 2023.”
• PHOTOGRAPH SHOWS: Sue Foxley