Cambridge has become the domain of the bio-scientists, but this in turn is attracting the white collar firms. David Quinn reports
Occupier demand in Cambridge is often seen as companies that employ people in white coats and take wet lab space on science parks on the periphery of the city.
Although there is still demand from occupiers such as these, and developments such as Cambridge Science Park, Granta Park and Cambourne Business Park continue to thrive, the frenzy of out-of-town activity in biotechnology and life sciences is not as noticeable as it once was.
This reflects the dip in demand across the country among many technology sectors.
However, Cambridge city centre is benefiting from resurgent demand for city centre space from occupiers of a different hue.
Professional service companies such as lawyers, bankers, surveyors, accountants, patent agencies and venture capitalists see the wealth of science and hi-tech companies around the city as fertile ground and are keen to obtain a neighbouring presence.
“That hive of activity has, to an extent, died off on the business parks but what hasn’t stopped is demand from professional firms in the centre,” says Jamie Green of Bidwells. Solicitors Eversheds has expanded its operation from a small to a major office, paying a record city-centre rent of £24 per sq ft for 36,000 sq ft at Kett House on Station Road. Meanwhile, Coutts bank and patent agent Marks & Clerk have also recently been attracted to the city centre.
“The government wants to see Cambridge expand and the view is that it will be a very different city in the future, with a larger population and new infrastructure,” says Green.
However, city-centre supply is troublesome, with barely a trickle of grade A office space coming onto the market.
This will be alleviated in the short term by Railtrack Developments’ and Wrenbridge’s Cambridge Gate scheme, which Green claims is the first speculatively developed city-centre office scheme in Cambridge for more than 10 years.
The 55,000 sq ft building was originally planned as a prelet for a government agency, but prelet fell through.
Work on the scheme is now expected to begin by the end of the year, with a record quoting rent of £25 per sq ft (£269 per m2).
In addition, City House on Hills Road has been refurbished following the resolution of a legal dispute that led to it lying vacant for 12 years. Forty per cent of the building has already been let, says letting agent Jon Hutt of FPDSavills.
In the longer term, there are some major developments that will transform the face of the city centre and, in particular, the golden T around the railway station.
The first of these is Ashwell Property Group and Railtrack’s redevelopment of Cambridge station. The developers have secured an 80,000 sq ft prelet to an undisclosed party that will encompass part of the Great Eastern House site, which Ashwell purchased earlier this year. Development will go ahead subject to planning consent, which is expected in the early part of next year.
For the rest of the site, 170,000 sq ft of office development is proposed, as well as a new swathe of retail and leisure. The office scheme will be a mixture of prelets and speculative development.
Paul Thwaite, chief executive of Ashwell, says: “It will be a total redevelopment of the station area that will encourage even more professional occupiers into the city centre.”
The other looming major city-centre development is the redevelopment of the Rank Hovis flour mill, which is due to be demolished. Although primarily a residential scheme, it is expected there will be some office space at the site, located near to the railway station. It is likely to come onto the market in 2005.
Industrial
Undersupply forces movement
While rents and capital growth in the industrial market around Cambridge are not traditionally considered strong in comparison with offices and science parks, they are holding up well as a result of undersupply.
The downside to this is that occupiers are moving away from Cambridge to parts of East Anglia where availability and choice are greater.
For example, a flurry of small freehold industrial deals has arisen at Kelly Developments’ Hall Barn Road scheme in Ilsham, near Ely.
“There is a shortage of smaller, modern industrial units in the local market. This, combined with low interest rates, has generated interest from local owner-occupiers who can buy more cheaply than renting,” says Duncan Wisbey of letting agent Januarys.
Similarly, Harris, formerly based in Coldhams Lane, Cambridge, was forced out to Hinchingbrooke Business Park, Huntingdon because a unit of 30,000-40,000 sq ft could not be found in the city.
Another problem for Cambridge is the loss of land to other, higher-value uses.
“Coral Park provided around 400,000 sq ft of industrial accommodation but within the next few years this will be reduced to zero as it is redeveloped for retail warehousing,” explains industrial specialist Russell Catley of Bidwells.
Agents predict more industrial land will be lost as demand for residential use continues to rise at an exponential rate.
Says Catley: “Within a couple of years there could be a shortage of industrial land in the area and local authorities now need to seriously consider allocating further land to satisfy future demand.”
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City centre office availability |
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Large offices are scarce and most stock is secondhand |
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Address |
Size (sq ft) |
Agent |
|
St George’s House, Lion Yard |
21,000 |
Bidwells/Dodson Jones |
|
First and second floors, Poseidon House, Castle Park |
13,000 |
FPDSavills |
|
Daedalus House, Station Road |
6,300 |
FPDSavills |
|
Ground floor, Poseidon House |
6,000 |
Carter Jonas |
|
Mount Pleasant House, Castle Hill |
5,000 |
Carter Jonas |
|
City House and Bridge House, Hills Road* |
104,000 |
FPDSavills |
|
Betjeman House |
11,000 |
Bidwells |
|
Rustat House |
5,500 |
Bidwells |
|
Murdoch House |
17,000 |
Januarys |
|
Total available units under 5,000 sq ft |
25,000 |
Various |
|
Total availability |
213,800 |
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Source: Bidwells *Grade A space |
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Housing
Shortage damages recruitment
When choosing to locate in Cambridge, there remains one major problem for occupiers; the availability of affordable city based accommodation.
Agents and developers note that there is a chronic shortage of suitable housing for graduates in the professional services sector, particularly those close to central Cambridge.
Jon Hutt of FPDSavills believes even if there was potential developable office space in the centre of town, the lack of cheap housing could seriously hinder an occupier’s ability to attract graduate staff.
Others believe the problem is restricted to key workers.
Siobhan Shadwell, the human resources director for KuDOS Pharmaceuticals, based in Cambridge Science Park, says: “Housing isn’t a big issue with any potential recruits we interview. We ensure that all candidates from outside the area are aware of the price of housing in Cambridge and suggest they look to live within a 30-mile radius.”
But Paul Thwaite of developer Ashwell Property Group is not convinced that the problem is restricted to the city centre, nor to any one sector.
His company has sponsored a Joseph Rowntree Foundation report called Housing the Cambridge Workforce.
“The study showed household income of £42,000 would be needed to buy a house in Cambridge,” says Thwaite.
Retail
Schemes that will soak up demand
Demand from retailers to infiltrate Cambridge is higher than ever. The city has risen from 13th to 4th place in research group FOCUS’s annual retail demand survey.
Will Mooney, of Januarys, believes this is partly a result of the city’s affluent population and partly due to high tourist spending.
“It’s also due to the relatively restricted size of the retail centre and the lack of available sites for out-of-town development,” he explains.
Luckily for retailers, there are several developments in the pipeline that will help meet demand in the medium term.
These include Prudential’s revised plans for an extension to the Grafton Centre, for which it recently submitted a planning application. If successful, the development will add 30,000 sq ft to the centre and will provide seven larger refurbished units on the southern side of Central Court, as well as 8,000 sq ft more space for Debenhams. It is likely to begin trading in 2004.
Plans for the Grand Arcade are also moving ahead now that a temporary home for retailer Robert Sayle has been found.
Subject to planning, work on the demolition of the old units should begin soon, says Mooney.
Out of town, Merrill Lynch Investment Managers is expected to begin work soon on the 125,000 sq ft second phase of its Cambridge Retail Park, which first opened in 2000. It is rumoured that a 60,000 sq ft prelet has been agreed with an undisclosed party.
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Cambridge: Development land pipeline |
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Some of the science and research parks are now full |
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Scheme |
Developer/owner |
Agent |
Size (acres) |
Land available now |
Development potential (sq ft) |
Wet/dry lab/office |
Planning timetable |
Comments |
|
Cambridge Science Park |
Trinity College, Cambridge |
Bidwells / CWHB |
130 |
Nil |
Nil |
Nil |
na |
Full (except for NAPP expansion land) |
|
Cambridge Business Park |
Crown Estate |
Januarys |
20 |
Nil |
Nil |
Nil |
Na |
|
|
Cambridge Research Park |
Slough Estates |
Insignia Richard Ellis/Gerald Eve/ FPDSavills |
204,000 sq ft |
na |
393,000 |
Na |
Na |
na |
|
Capital Park |
Capital & Counties/ |
CBHillier Parker/ MPM Properties |
42 Januarys |
4 (est) |
67,000 |
Either |
162,000 of B1 or B1(B) (unrestricted) |
Plots for 28,000 sq ft and 39,000 sq ft. |
|
St John’s Innovation Park |
St John’s College |
Carter Jonas |
19 |
Nil |
Nil |
Nil |
na |
Full when spec units let |
|
Cambourne Business Park |
Development Securities |
FPDSavills/ DTZ/ATIS Real Weatheralls |
50 |
30 |
520,000 |
Either |
Consent for 55,000 sq ft |
Open B1 consent |
|
Granta Park |
MEPC |
Carter Jonas |
86 |
Nil |
185,000 |
Either |
Potential for more subject to planning |
No planning consent |
|
Peterhouse Technology Park |
CIN |
Carter Jonas |
12 |
Nil |
Nil |
– |
na |
Full |
|
Babraham Institute |
Babraham Institute |
na |
12 |
12 |
217,000 |
Either |
Outline consent No developer |
B1b consent. Timing uncertain |
|
Buckingway Business Park |
Carisbrook Alliance |
na |
31 |
9 |
230,00 |
Either |
Open B1 consent |
Spec/D&B start at any time |
|
Chesterford Park |
Morley/ Churchmanor |
Insignia Richard Ellis |
250 |
91 |
350,000 |
Either |
Masterplan agreed but planning awaited |
B1b only with R&D restriction |
|
Wellcome Trust, Genome Campus Hinxton |
na |
na |
25 |
25 (est) |
290,000 |
Either |
Application referred to Secretary of State |
Revised application awaiting decision |
|
Cambridge University, West Cambridge |
Cambridge University |
na |
150 |
130 (est) |
1,500,000 |
Either |
Outline consent granted |
Restricted to organisations working with the university |
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Source: Insignia Richard Ellis/Bidwells |
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