Office rents in Cambridge have risen dramatically so Cambridge is now almost on par with London.
A report by property agent Bidwells disclosed that some office rents in Cambridge City Centre have reached £41 sq ft. This is a 7.9% increase from 2017. Bedwells predicts that rents could reach £44 sq ft within five years.
Cambridge is emerging as a ‘core’ market for office property. Sue Foxley, research director of Bedwells, says that the rise in rents is similar to how sharp rent increases happened in London following the restructuring of the financial sector in 1980s and 1990s. Rents in the City district, then Docklands increased sharply. She added:
“Cambridge is seeing the same dynamic, driven by its pronounced exposure to the emergence of the UK’s leading science and technology companies. Geography is increasingly irrelevant. The longstanding delineation of London, the South East and other regional markets is becoming outdated in the evolving economic landscape.”
Research by Cambridge Ahead and the Centre for Business Research in 2018 showed that business expansion in Cambridge was 14.4% over a 12 month period from 2017 to the beginning of 2018. Employment grew by 9.2%. Foxley said:
“This recent expansion of turnover ahead of employment suggests productivity gains, allowing companies to compete for high skilled staff and push business space affordability limits, resulting in the £40 psf rent milestone being breached.”
Investors who want to purchase office buildings in Cambridge have a wide range of commercial mortgage deals to choose from.