Its research has revealed that the Cambridge office and laboratory market posted an all-time high, with activity approaching 950,000 sq ft and 2015 set to surpass that level.
And Cambridge is also once again smashing past records, as rents in the City's office market are expected to reach £39 per sq ft over the next five years.
Headline figures for Cambridge include:
- Business base to increase 50% by 2018
- Office rental value rise to £34 psf– the highest rental level in any UK city outside of London
- Cambridge has the highest level of patents granted per 100,000 population
- Rents for prime fully-fitted Labs is now £36 psf
- Industrial rent value is approaching £10 psf
- Office availability in 000s sq ft is 601.7 – requirement is 1.844.9
- In excess of 350,000 sq ft of speculative schemes due to commence and 150,000 sq ft under construction
- Industrial availability rate 5% - would reduce to 2.1% if poorer quality second-hand space is removed
Will Heigham, head of Business Office Space, Cambridge, said: "The rapid growth of Cambridge as a business location over the past few years and the increased levels of demand for floor space have seen office rent values rise to £34 per sq ft, the highest rental level in any UK city outside of London, and industrial rental values approach £10 per sq ft.
"New rental levels are expected to be set out on schemes currently being proposed, with the construction of 350,000 sq ft of new speculatively built office space due to commence in 2015.
"The Cambridge economy is expanding at a rapid pace and the imminent arrival of AstraZeneca will create further demand for business floor space.
"The next few years will see increased pressure on existing floor space and rental values are expected to reflect this.
"There are a number of speculative schemes due to start construction with more to follow. And the strength of the Cambridge market has begun to impact on other markets in Cambridgeshire, with overall activity in the county up by almost 50% on the previous year's levels of take up in the office market and 35% in the industrial sector."
The current stock of office and R&D space in the Cambridge area is close to 8m sq ft, and this is set to increase significantly over the next three years.
Cambridge Assessment has already started on site at its new 350,000 sq ft headquarters building to the south of the city centre, and the much publicised new 600,000 sq ft AstraZeneca global headquarters has now received planning approval at the Biomedical Campus.
Bidwells' new style data-book also now includes for the first time information relating to the London office market.
And as always, the data book gives a comprehensive overview of the office and industrial markets across Cambridge, London, Norwich, Milton Keynes, Northampton, Chelmsford and Oxford. And it includes vital data regarding prime headline rents, take-up, demand, availability, prime yield and total returns.
Almost all the office markets in the Bidwells region have recorded their best year of activity since 2007 and this growth is expected to continue to increase.
Saul Western, Partner, Investment added: "Although the past few years have been exceptional for these markets, we believe that the story will continue for the next few years, with rents in the Cambridge office market expected to reach £39 per sq ft over the next five years, growth of 2.8% per annum, whilst the Cambridge and Milton Keynes industrial markets are forecasting growth of 4.7% and 2.1% per annum respectively.
He added: "The strong occupational markets have had a significant impact on rental values in these markets with prime rents up by 4.9% per annum over the past five years in the Cambridge office market and 2.8% and 1.6% per annum in the Cambridge and Milton Keynes industrial markets respectively. Perhaps the most surprising factor has been the strength of the secondary rents, with growth exceeding the prime rental figures in all three markets."
In this Spring edition of the Data Book, Bidwells also focuses on the tension in planning policy arising from local and central government drive to deliver more housing on brownfield sites, and the impact this has on the stock of office floorspace in higher value areas.
At a glance – key facts from the Business Space Data Book:
- Property investment market has recovered to levels last seen in 2006/07 – with overall transaction levels above £70bn in 2014
- The Cambridge office and laboratories market posted an all-time high, with activity approaching 950,000 sq ft – and 2015 should surpass that level
- Industrial market has take-up of 630,000 sq ft in Cambridge
- Industrial market take-up in Milton Keynes is 2.3m sq ft
- Prime rents up by 4.9% per annum over the past five years in the Cambridge office market and 2.8% per annum for the industrial market
- Prime rents up 1.6% per annum in Milton Keynes
- Secondary rental growth has exceeded the prime rental figures in the Milton Keynes and Cambridge industrial markets and the Cambridge office market
- Prime West End rents in London were up by 9.1% over the year to end 2014 at £120 per sq ft
- Rents in the Cambridge office market are expected to reach £39 per sq ft over the next five years, a growth of 2.8%
- Cambridge and Milton Keynes industrial markets are forecasting growth of 4.7% and 2.1% per annum respectively
- Latest data shows the economy grew by 2.6% - the UK's highest growth rate since 2007
- Property investment – UK institutions joined overseas investors as the largest contributors to activity in this market
- (Office Market) Prime headline rent; Cambridge £34, Cambridge Labs £29, Chelmsford £26, London West End £120, Milton Keynes £21.50, Northampton £13.50, Norwich £16.50 and Oxford £23.50 (£psf)
- (Industrial Market) Prime headline rent; Cambridge £9.75, Milton Keynes £6.75, Northampton £5.75, Norwich £5.75, Oxford £8.50 and Thurrock £8.75
About Bidwells
Established more than 175 years ago, today Bidwells is one of the UK's leading property consultancies. We employ almost 500 people in 13 offices across England and Scotland and provide a full range of services across the Commercial, Residential and Rural sectors.
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Nicola Walker
PR Executive
Marketing Team
dd: 01223 559393
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