- What Savills forecasts continued rapid growth in lab and office rents in Cambridge
- Why Demand from life science occupiers is strong
- What next Lab rents predicted to reach £59/sq ft by 2025
The rapid pace of growth in laboratory and office rents in Cambridge is expected to continue thanks to the city’s booming life science market.
Savills data, shared exclusively with React News, shows that lab rents passed the £50/ sq ft milestone last year and are forecast to reach £54/ sq ft this year, before accelerating on to £59/ sq ft by 2025.
Office rents are also on the rise, particularly in the city centre, where they are expected to reach £52.50/ sq ft this year and £56/ sq ft by 2025.
There are significant life science schemes being planned to help meet growing occupier demand. Space that is due to be delivered in the next two to three years includes 100,000 sq ft at Cambridge Biomedical Campus and a further 95,000 sq ft at Unity Campus, but this is not expected to be enough to keep up with demand.
Savills notes that technology and science related businesses accounted for 80% of total takeup across the Cambridge market last year. Takeup was 53% higher than in 2020 at just under 700,000 sq ft driven by large deals including Roku taking 116,000 sq ft at Cambridge Science Park.
This takeup is predicted to be lower because of a lack of supply of new space.
Mark Taylor, head of the commercial team at Savills Cambridge, said: “There are no shortage of companies looking to snap up space as soon as it becomes available.”
Investment hit £1bn last year
The positive market dynamics are not lost on investors and developers who are ploughing ever increasing sums into Cambridge. Savills said investment volumes in the city hit £1bn last year, 600% above the five-year average.
Notable deals included BioMed acquiring two development sites at Cambridge International Technology Park and Granta Park for a combined total of £240m and Brockton Everlast buying development sites and five existing buildings at Cambridge Science Park from Legal & General for £96m.
James Emans, director in the investment team at Savills, said; “We estimate there is over £10 billion of live capital looking to be deployed across the Arc, and with very limited standing stock, many are prepared to undertake new development.”
