Technology take-up triggers Cambridge space race
A surge of office space take-up by technology companies in Cambridge has shredded availability in the sought after sub-10,000 sq ft bracket – and that could stifle startups’ growth plans, according to Savills analysis.
Savills reports spiralling deals relating to offices of this size in the second half of 2017, with technology occupiers accounting for 42 per cent of new leases.
The second half to date has seen only five deals exceeding 10,000 sq ft, including PWC’s pre-let of 12,195 sq ft at the Maurice Wilkes Building on St John’s Innovation Park. Savills notes that whilst deals this year have been largely dominated by small startup firms moving into second and third phase growth stages, the first half of 2017 also saw a number of corporate occupiers including Amazon, Heptares and Astex Pharmaceuticals commit to more than 130,000 sq ft of office and lab space across the city.
As a result, Savills research shows that in Cambridge’s key tech cluster, located in the city centre, only 23,832 sq ft of space remains available in the sub 10,000 sq ft bracket.
Furthermore, the parks are seeing similar strains on supply with circa 50,000 sq ft of vacant existing office accommodation across the northern cluster of varying grade.
William Clarke, associate director in the business space team at Savills Cambridge, said: “Despite there being more than 160,000 sq ft of speculative office space under construction at 50 and 60 Station Road in the city centre, this is not due to complete until 2019.
“In the interim, a lack of existing opportunities within the northern cluster and city centre means that we will need to find creative solutions in order to deliver the space that businesses from corporates to startups might need.”
The lack of stock, coupled with strong ongoing occupier demand, is set to drive up rents in Cambridge city centre. Savills predicts that rents in this location will continue to strengthen during 2018 as they edge closer to £40.00 per sq ft.
Clarke adds: “Whilst the city will always attract household names due to its status as a key global business location, there is a danger that its startup community will find it harder to spread their wings, stifled by a lack of suitable space, both in the beginning and as they continue to grow.
“For this reason, Cambridge needs to provide a spectrum of available space, along with the necessary infrastructure to nurture home-grown talent.”
• PHOTOGRAPH SHOWS: William Clarke