Cambridge Industrial market supply reaches 15 year low
Bidwells Spring 2021 report has revealed that the Cambridge Industrial market supply has reached its lowest level in more than 15 years. The availability rate has dipped to 3.7%, leaving only a few immediate options for occupiers seeking space.
The demand shortage has resulted in prime rents reaching a new high of £14.50psf by the end of 2020, a 41.5% growth since 2015. Current requirements stand more than four times ahead of availability due to the growing science and tech sectors adding pressure.
As several developments complete over the next few years, the virtual absence of suitable Grade A space for such businesses will ease to an extent, but the pressure of prime rents will still exist.
Aitchison Development’s at Bourn Airfield has received approval. Product design group Cambridge Design Partnership has agreed to take a 53,430 sq ft unit in the first phase of development. The additional 14 phases one unit will range in size from 1,570 sq ft and 28,640 sq ft.
New R&D mid-tech units plans for Cambridge Research Park have been submitted to provide a further 80,000 sq ft at the park to help keep up with demand.
The growth of Peterborough as a location for significant logistics facilities has continued through the past 12 months. US food group, McCormick & Company’s commitment to a 636,400 sq ft facility earlier in the year, a further 140,000 sq ft letting, was secured to Amazon at Plot 302.
Cambridgeshire County Council purchased the 91,500 sq ft office and industrial Evolution Park at Impington from Cambridge Realty for £29.1m. The purchase price represents a net initial yield of 5.70%. The park is occupied by several high tech companies, including Cambridge Medical Robotics and Intelligent Fingerprinting.
The largest transaction in H2 2020 was the 50,284 sq ft letting to Beam Group at Buckingway Business Park.
“Investment in the Cambridgeshire industrial/distribution market eased back to £55m in 2020 from £92m in the previous 12 months as investors showed a reluctance to sell out of the future growth that is inherent in the market. Prime industrial yields in Cambridge edged down to 4.25% in the second half of 2020 as prime rents move higher and investors remain confident about further growth,” said Sue Foxley, Research Director at Bidwells.