For Cambridge the first half of 2017 was driven largely by corporate activity, but so far the latter part of the year has been characterised by a number of significantly smaller deals as tech occupiers, in particular, seek out suitable start-up space in the city.
In Q3 2017 only two deals exceeded 10,000 sq ft, namely PWC’s pre-let of 12,195 sq ft at the Maurice Wilkes building on St John’s Innovation Park and a further letting of 11,359 sq ft in City House on Hills Road. This is in sharp contrast to the start of the year when the likes of Amazon, Heptares and Astex Pharmaceuticals took upwards of 130,000 sq ft in total across Cambridge.
The burgeoning tech cluster that can now be found in Cambridge city centre has continued to attract firms looking to capitalise on the success of their peers. As a result, requirements for sub-10,000 sq ft office suites has skyrocketed and as much as 35 per cent of the deals which completed in Q3 were to technology based businesses.
The city has produced some of the UK’s biggest success stories in recent years, including Raspberry Pi and Darktrace, and with 353 start-up births this year, according to Tech Nation 2017, it is little wonder that we have seen a spike in activity.
So far so good, right? While at present Cambridge’s status as a global tech cluster remains secure, the reality is it’s rapidly running out of space. In the short term, the city centre has practically no availability for small and medium-sized firms and, although churn will of course bring property back to market, there are limited options for occupiers at this time. It’s a similar story on the parks, with under 50,000 sq ft of space currently vacant across the northern cluster.
Although there is more than 160,000 sq ft of speculative office space under construction at 50 and 60 Station Road in the city centre, this is not due to complete until 2019. In the interim, creative solutions have been floated. For example, there are a couple of existing opportunities in Cambridge city centre coming forward that would lend themselves well to a serviced office operator that would provide the flexibility that growing businesses, in particular start-ups, need.
What’s clear is that Cambridge’s popularity is unlikely to wane. The pull of a world famous university along with a renowned teaching hospital means that businesses large or small will be drawn to the city. However, with limited opportunities and competition for staff, this is likely to bring alternative capitals, like Boston and Beijing, into focus as potential locations for this kind of expansion. Therefore, we must ensure that not only is there a spectrum of available space, but that this space has the built in flexibility to allow smaller firms to grow into the multinational companies of the future.
Read more: Cambridge: building its global future