Cambridge is a city of two tales. It is a city where business is booming. Once a city that was globally recognised for its university, it is now a city that is globally recognised for innovation, science and technology.
The city is home to some of the biggest names in the technology and biosciences sector, counting AstraZeneca, Raspberry Pi, Darktrace, Apple and Amazon among it employers. The city has fared reasonably robustly during the pandemic, recovering more rent in the initial aftermath of lockdown than any other city across the UK.
But it is also the UK’s most unequal city. It is a place where affordability has become has huge problem. Where the ratio between average earnings and house prices has ballooned to 14, more than double the UK average. It is a city where there is a growing homelessness issue and a city where its history and a tight greenbelt deliver more challenges than opportunities.
Cambridge needs to find its balance. Could a host of large-scale development opportunities, a focus on how its booming life sciences sector could enable growth across the rest of the UK, and an effort to provide true affordability be the solution?
A city of opportunity
When it comes to investment, says Naisha Polaine, senior adviser for property and capital investment at the Department for International Trade, Cambridge is a no-brainer. The city has sustained economic growth. In the five years to 2019, it delivered a 5% growth rate compared with 3% across the UK as an average.
“If you are an investor, you don’t need much more than that if you are looking for strong and stable returns,” says Polaine.
For Rob Sadler, head of Savills’ Cambridge office, the city has continued to grow and strengthen during the pandemic, with several new development opportunities coming forward.
At the St John’s Innovation Park in north Cambridge (pictured), Turnstone Estates with St John’s College have recently submitted plans for the next phase of extension at the park, creating two new 85,000 sq ft office and R&D buildings and a new transport hub.
Elsewhere in the northern cluster, major opportunities are set to come forward through the relocation of the Anglian Water site and Marshall Airport site. Together they will provide the opportunity for thousands of homes to be built and millions of square feet of commercial development.
“The northern cluster is providing a sustainable environment for Cambridge,” says Sadler, “somewhere where you can live and work.”
The growth of life sciences
When it comes to work in Cambridge, much of it is focused around innovation, science and technology. And one of the strongest sectors in Cambridge is life sciences. Savills’ Sadler says the sector has seen real growth during the pandemic and is set to benefit further with increased interest and investment.
There are more than 450 life sciences companies in Cambridge, which collectively turn over some £6bn pa. Those companies are spread across the city and its surrounds from the north of the city, through the centre and into the south and, according to Savills’ latest figures, represented 27% of take up in Q2 2020. Although this was a slight drop on 2019, it was caused mainly by a lack of availability, which stands at 1.5%, rather than demand.
For Orestis Tzortzoglou, development director at BioMed Realty, the opportunity that Cambridge provides through its life sciences sector is vast, particularly when coupled with the government’s wider investment into R&D.
“It is the growth story of Cambridge over a number of years that has made us a huge advocate in this market,” he says. “That growth has been translated into more real estate. We have seen the organic growth of a number of locations within the Cambridge market, both in the city centre but also on the various science parks – Cambridge Science Park, Granta Park, Babraham, the Genome Campus – and those have grown quite significantly and we believe that growth will continue as the R&D drive keeps growing in Cambridge.”
He adds: “The UK government spending in health and R&D has been close to £3bn and I think that will only continue. When you look at the industrial strategy and the core drivers that the government and nation is looking to promote, R&D is one of the core strengths and we will see that translating into more growth in markets such as Cambridge in the years ahead.”
But growth always brings with it challenges. And in the case of Cambridge, its big challenge focuses on affordability.
The great big housing challenge
House prices have grown by almost 40% in Cambridge over the past decade and now average around £440,000. The average wage profile of a Cambridge dweller is £33,000, making getting on the property ladder almost as impossible in the city as it is in the capital.
But there are moves being made to try and balance out the inequality in the city. The recently announced planning reforms may make it easier to develop in certain areas and numerous developers are coming forward with potential solutions to provide housing for all.
For Mark Shirburne-Davies, a director of House by Urban Splash and the man in charge of delivering more than 400 homes in Northstowe, the solution is in modern methods of construction and a pioneering attitude. He says developers need to be more innovative and agile in how they deliver affordable homes.
“Affordable homes can often be done down, be very simple boxes and not beautiful homes,” he says. “For us, we want them to be as beautiful as the private homes. It should be tenure blind when you walk around our developments.”
He says the modular homes that Urban Splash will deliver at Northstowe will set a benchmark for MMC and that once built will “change people’s hearts and minds”.
Cambridge has a real opportunity to change people’s lives, not just their hearts and minds. It is a city that could deliver a vaccine that rids us of the current pandemic that has turned many of our lives upside down and it could be the city that showcases how to turn inequality into equilibrium.
It is a city that has a host of challenges, admits Tom Newcombe, partner and head of the planning and environmental team at Birketts, but it is also a city that is aware of its issues and knows what needs to be done.
And, says Newcombe: “If anywhere can, Cambridge can.”
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