- Data from property consultancy Bidwells shows science and technology companies were responsible for 86% of Cambridge office and lab uptake in 2023, a record high in the current cycle.
- Lab take-up totalled 272,000 sq. ft in 2023, three times higher than that of 2022, facilitated by the delivery of new space in H2 2023.
- However, there persists an 850,00 sq. ft shortfall of lab space in Cambridge, with demand far outstripping supply. Rents for lab space increased 22% in 2023 to reflect this.
Take-up of lab space totalled 272,000 sq. ft in 2023. A major pharmaceutical company on the Cambridge Biomedical Campus was the largest letting of the year, while across the Cambridge market, there were five laboratory lettings in excess of 20,000 sq. ft. This was facilitated significantly by the delivery of new labs in the second half of 2023 and is nearly three times more than the take-up level achieved in 2022, where a lack of available supply significantly held back the market.
Despite the new space that has been delivered, however, there remains an 850,000 sq. ft shortfall in Cambridge, indicating the strength of demand for lab facilities. This has placed notable upward pressures on rents, which rose 22% in 2023 with a further 5% uptick expected this year, further underlining the strength of demand.
Demand for office space has been similarly resilient because of strong demand from science and technology companies. Take-up hit 420,00 sq. ft in 2023 in line with 2022 activity. This was supported by the expansion of Cambridge-based tech occupiers and serviced offices catering to start-ups. Nyobolt and Samsung were some of the year’s key lettings further reflecting the diversity of the tech sector in the cluster.
Office quality and location have been key determinants for businesses, from both those within Cambridge and those new to the city. An increased focus on the retention and recruitment of staff helps to explain less of a willingness to compromise on these factors, which reflects in the type of being let quickly and the type of space that remains available. The availability of office space rose to 12.2% by the end of the year but is dominated largely by lesser quality, dated properties, with much of the better-quality space currently under offer.
Sue Foxley, Research Director at Bidwells, said:
“The data demonstrates the strength of science and tech demand for space in Cambridge despite continue economic uncertainty and finance constraints. The rapid absorption of well-located laboratory space as it has come to the market this year underlines the potential opportunity presented by Cambridge. The UK government should capitalise on the demand for such facilities and ensure that two of the country’s highest potential business sectors can be accommodated by streamlining a planning system that has been inherently obstructive towards development.”
