Demand for lab space in Cambridge region at five-year high, says Bidwells
Demand for laboratory space in the Cambridge region is at its highest level for five years, according to research by Bidwells.
Its spring 2021 report says this is set against an availability rate of 3.7 per cent, placing pressure on rents.
Take-up of office and laboratory space in the region in the second half of 2020 returned to trend levels, it says.
Knowledge-intensive businesses continued to dominate Cambridge letting activity, accounting for 69 per cent of take-up last year.
The most prominent office letting in December 2020 was completed by US software company MathWorks, which leased a 93,000sq ft TusPark development within One Cambridge Science Park - its third site on the park.
Meanwhile, flexible office space provider Fora agreed to lease a new 64,500sq ft building at 20 Station Road on the CB1 site, which is due to be completed in 2023.
Such space will be much-needed, says Bidwells, with Grade A stock availability for both office and lab sectors standing at only 9.7 per cent at the end of 2020.
While prime office yield remained stable at 4.5 per cent, average transactional yield for offices rose to 4.95 per cent. Prime lab yield was also at 4.5 per cent at the end of last year.
Schemes that will offer almost one million square feet are set to complete in the coming year. But more than 84 per cent is committed, leaving just under 130,000 sq ft to come to market.
Sue Foxley, research director at Bidwells, said: “The science and tech sectors drove investment transactions to £300m in 2020; we estimate that this will rise for 2021 for both offices' and laboratories as industries continue to thrive, settling back to pre-Covid trend levels or higher.
“The main concern will be the lack of available first-grade space; however, we expect an increase of second-hand space to be released to the market, which has started to happen in 2020.”
Read the report at bidwells.co.uk.