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As of Q3 2024, laboratory take-up in Cambridge has reached 94,800 sq ft, with 42,300 sq ft transacted in this quarter alone, marking a 12% increase compared to the Q3 five-year average. At the close of the quarter, an additional 10,000 sq ft remains under offer at Cadence, Unity Campus.

Three key transactions contributed significantly to take-up: Immaterial secured 12,500 sq ft of mid-tech space at Accelerator Park, Sawston, and Biocrucible completed the assignment of AbCellera’s lease at the Emmanuel Building at Chesterford, covering 9,800 sq ft.

Overall, laboratory-led demand in Cambridge has reached 899,500 sq ft. Of this, 450,000 sq ft is classified as active demand, down slightly from last quarter as companies continue to wait for funding. The increase in overall demand, however, is mainly driven by larger requirements entering the market in Q3, reflecting Cambridge’s growing appeal to larger occupiers and solidifying its status as an established market.

Vacancies in Cambridge have however increased slightly due to the completion of developments such as 1 Granta Park. As of the close of Q3, 211,200 sq ft of available up-and-built laboratory space is on the market. Despite this rise, Cambridge maintains the lowest vacancy rate compared to Oxford and London, highlighting the resilience and maturity of the Cambridge science and technology market.

To date, Cambridge-based life science and biotech firms have raised £258 million through 67 fundraisings and grants in 2024. While total venture capital raised remains subdued when compared to recent years, the number of fundraisings aligns closely with the five-year average, maintaining confidence that raisings are being achieved, though of smaller amounts.

At the close of Q3 2024, laboratory take-up in London totalled 18,700 sq ft, with three deals having been completed during the quarter. Laverock secured 3,000 sq ft at LBIC Tribeca, as Baseimmune also took 3,350 sq ft of space there, and Myricx Bio acquired 2,000 sq ft at 20 Water Street.

London’s laboratory market remains in its growth phase, with deals so far this year focussing on fully fitted CL2 laboratory spaces under 5,000 sq ft. This reflects ongoing demand from early-stage companies and a developing ecosystem. Encouragingly, there is positive momentum, with an additional 90,600 sq ft of laboratory space under offer by the end of September. Assuming these deals complete before year-end, London will exceed its five-year average take-up (2019-2023) of 99,400 sq ft by 10%.

Total demand for laboratory space in London has reached 785,600 sq ft, with 363,200 sq ft classified as active demand. Notably, 75% of total demand is for space under 10,000 sq ft, reflecting the market’s focus on emerging companies seeking smaller, fully fitted laboratories. However, in recent months, there has been a significant rise in demand for larger spaces, with requirements for units ranging from 10,000 to 30,000 sq ft re-emerging in the market, making up 17% of demand.

This quarter saw a key development with Eli Lilly’s requirement resurfacing and focusing on Kings Cross. Although their space needs have reduced from 75,000 sq ft to 30,000 sq ft, this resurgence highlights the growing demand and improving market confidence in the sector.

A more favourable venture capital environment is fuelling this activity, with £1,026 million raised so far this year by life science and biotech firms headquartered in London, spread across 151 fundraisings and grants. This figure already represents a 48% increase over the five-year average of £694 million. Notably, London-based companies have contributed 66% of the total venture capital raised in the UK’s life science “Golden Triangle” in 2024.

However, despite the robust demand and positive funding landscape, 266,700 sq ft of laboratory space remains available, as the first wave of purpose-built lab buildings continues to enter the market.

In 2024, 103,100 sq ft of laboratory space has  transacted in Oxford, with a further 89,600 sq ft under offer. Notably, when we exclude the Moderna deal at Harwell in 2023, which comprised 65% of total take-up, take-up by the end of Q3 2024 is already 30% higher than the full year prior. If all current deals under offer are completed by year-end, Oxford is projected to surpass its five-year average take-up (2019-2023) by 3%. 


Significant deals include Nucleome securing 17,100 sq ft of fully fitted laboratory space at Inventa and Yellowstone completing 8,100 sq ft at Building 4100, ARC Oxford.

Demand for laboratory space in Oxford has reached 845,300 sq ft, with 503,600 sq ft classed as active demand. New large requirements, specifically those exceeding 50,000 sq ft, now represent 37% of active demand by area (185,000 sq ft).

Despite the strong demand, Oxford still has 255,000 sq ft of available laboratory space, mostly located in out-of-town science parks. In the city centre, Inventa remains the sole source of available laboratory space.

Oxford-based life science and biotech firms have raised £266 million across 43 fundraisings and grants in 2024. Similar to Cambridge, venture capital in Oxford remains limited, falling short of the five-year average of £628 million. However, the emergence of larger requirements in the market does indicate a gradual recovery in market confidence.

Science & Technology Report: Golden Triangle - Q3 2024 

Partner
Head of Science & Technology

Matt Smith

20 Sep 2024 | by Simon Glenn, Matt Smith

Problems of oversupply are not an issue in the UK

Matt Smith and Simon Glenn at DTRE respond to Green Street News columnist Oliver Shah’s recent warning that the sharp jump in US lab vacancy rates should give UK developers pause for thought.

Oversupply, rising vacancies and funding challenges: there’s no doubt that the US life sciences real estate market is spluttering. Naturally, given our unhealthy tendency to compare ourselves to the US, some argue that the UK’s own sector should brace for a downturn.

However, though we may be biased, we have reason to believe that a sickly Boston need not raise red flags – the UK has been shaped by very different market dynamics, and possesses unique strengths. The Golden Triangle is positioned to thrive, bolstered by world-class academic institutions, growing demand for healthcare solutions and an industrial growth strategy with life sciences at its heart.

It is true, particularly in key hubs like Boston and San Francisco, that oversupply has driven up vacancy rates and created concerns about the sustainability of demand. This is a consequence of rapid, unchecked investment and expansion in those markets. In typical American fashion, they wanted bigger and better, yesterday.

While some investors also got overexcited about UK life sciences, the market over here operates on different fundamentals, maintaining a more measured approach to growth. After all, Brits to tend to show more reserve.

As in classic development cycles, supply – by virtue of the time taken to build – has lagged demand. And, while there was no doubt a glut during the Covid-19 pandemic, the UK’s planning system, archaic or not, has limited speculative overdevelopment. By filtering planning permissions, only viable projects have progressed, while others have been paused – effectively turning off the tap.

For occupiers, the VC funding challenges seen in the US should also be less of a concern on this side of the pond, where private investment has been matched with successive governments strongly committed to the industry.

Life sciences sits at the heart of Labour’s growth plans, offering many an incentive for companies developing next-gen healthcare solutions. Moreover, despite a year-long clinical trial decline, a new £400m public-private collaboration, VPAG, is set to reinvigorate pharmaceutical testing.

Perhaps most crucially, though, the UK life sciences sector is not solely profit-driven. The NHS is the crown jewel of socialised healthcare: it’s our sacred cow. Life sciences, and its ability to reduce costs through preventative medicines, is a critical part of the government’s mission for an NHS fit for the future. This altruistic foundation – where public health needs outweigh short-term financial gain – fosters a more resilient market, less prone to the boom-and-bust cycles seen in the US.


Life sciences sits at the heart of Labour’s growth plans

A further compelling driver of UK life sciences is demographic shift. In the past 40 years, the number of people in England aged 50 and over has increased 47% to more than 21 million – almost 40% of the population.

It’s not rocket science: this will continue to create unprecedented demand for healthcare services. Many a top doctor has warned of the impact a lack of medical innovation could have on the NHS and society at large.

For example, we can expect a sharp rise in chronic diseases, fuelling demand for pharmaceutical developments, biotechnology and medical research – all of which must be facilitated by physical infrastructure. 


While Boston has MIT and Harvard, the core of the UK’s life sciences market is its unmatched access to multiple top-tier institutions.

When it comes to research and discovery, the Golden Triangle boasts four universities in the global top 10, and 26% of UK graduates come from STEM courses, compared with 19.6% in the U.S. This academic strength sets the Golden Triangle apart from many US markets.These top universities also provide access to funding, both public and private, ensuring that companies in the UK are well capitalised and can grow without facing the liquidity crises seen in the US.

Life sciences, like AI, is here to stay, poised for steady and sustainable growth


Only recently, Nvidia’s share price plunged almost 10%, dragging a basket of chip stocks with it. The drop reflected broader economic caution, not a lack of belief – AI has already been integrated into everyday life, cementing its long-term potential.

The same could be said for life sciences which, like AI, is here to stay, poised for steady and sustainable growth. According to Oxford Economics, the sector outperforms many others, with demand resilient to economic fluctuations. This demand, led by the NHS, is why UK pharmaceutical output is projected to grow by an average of 1.3% annually from 2024 to 2026.

We also can’t forget that lab space is not only critical for life sciences – it’s essential for battery tech, green energy, planetary health, plastic alternatives, and many other cutting-edge industries. These all require specialised spaces to thrive, and will continue to need more of it.

While the US market may be facing challenges, structural weaknesses are not necessarily mirrored in the UK. Our market is built on different dynamics, driven by long-term demand for healthcare solutions, world-class research institutions and strong government support.

Comparing ourselves to our American friends is an easy, but cheap, argument to make. Look more closely and you’ll see it’s a different sport entirely.

America's life sciences woes won't infect the UK market

5 Things You Need to Know About Science & Technology in the Golden Triangle

Laboratory leasing activity across Cambridge in the opening half of the year reached 52,500 sq ft, falling 40% from the highest H1 recorded in 2023 (87,400 sq ft) but positively remaining 20% above the H1 5-year average (41,600 sq ft).

Take up was led by lettings at Unity Campus as Welbeck Health Partners leased 31,000 sq ft at Orion, and ViaNautis (Soma Serve) secured 10,800 sq ft of fitted space at Cadence, also on the park.

At the close of H1, there was a further 31,000 sq ft under offer which we expect to complete in Q3.

Demand for laboratory space remained robust in Cambridge, with 783,000 sq ft of named demand at the close of H1. Of this, 478,500 sq ft is active demand and 304,500 sq ft is upcoming demand, with the majority temporarily put on hold due to wider macroeconomic uncertainties.

We have seen an increase in 50,000 sq ft + requirements coming live, more than in the rest of the Golden Triangle, now representing 38% of demand. Importantly, we are also still seeing the growing demand for smaller, fully fitted laboratories by occupiers looking to take turnkey space, with requirements of up to 20,000 sq ft representing 20% of demand.

This change in demand profile underscores the importance of providing a variety of fit out specs to appeal to the broadest range of demand/occupiers.

At the end of H1 there was 151,000 sq ft of available up-and-built laboratory space, with the majority located within the southern Cambridge cluster across Granta Park, Babraham Research Campus, The Press, and Unity Campus.

Excluding the southern cluster, there is practically no up-and-built laboratory space available for immediate occupation in Cambridge, maintaining a strong supply-demand imbalance.

In response to this supply-demand imbalance, there is 4.7 million sq ft of laboratory-led space due to be delivered by the end of 2028. Of this, 17% (799,600 sq ft) is currently under construction or being repurposed which will help alleviate the supply restraints in the short term and support leasing activity across the next 12 months. 18% of the pipeline however is still subject to planning.

With demand continuing to outweigh supply, rental growth prospects remain strong, with several schemes providing fitted space quoting over £70.00 per sq ft.

£119 million was raised by 46 life science and biotech companies based in Cambridge across H1, a 28% decrease on venture capital raised in H1 2023.

Whilst the sluggishness of venture capital funding has persisted into H1 2024, the wake of the election and the improving economic landscape should recover sentiment and motivate investment into these companies. It will also encourage companies that have successfully raised to satisfy their space demands.

Since 2019, Cambridge-based companies have collectively raised £3.6 billion - capital that will be directed into real estate once the climate steadies.

Laboratory take up in Oxford throughout H1 2024 reached 77,100 sq ft, 22% above take up across Cambridge and London combined.

At the end of June, there was a further 29,800 sq ft of laboratory space under offer, with 57% having already transacted at the beginning of Q3. If the remainder of this space completes, take up in Q3 looks to be in line with the 5-year average take up across the third quarter (31,500 sq ft).

Take up in H1 was led by the Ellison Institute leasing 27,800 sq ft at Winchester House on The Oxford Science Park, and OrganOx taking 17,700 sq ft of space on an assignment at Building 3500, ARC Oxford.

Further leasing activity in the second half of the year will be driven by the 451,200 sq ft of named demand for laboratory space, of which 332,000 sq ft is active. Of this demand, 48% is for space smaller than 20,000 sq ft, with 38% for space from 20,000-50,000 sq ft, and 13% for space over 50,000 sq ft.

At the end of H1 there was 282,000 sq ft of available up-and-built laboratory space in Oxford, with just 45,400 sq ft of this in the city centre, and the remainder across Milton Park, Abingdon Science Park, The Oxford Science Park, and Begbroke Science Park.

There is 898,600 sq ft of space currently under construction/refurbishment, with 23% (205,000 sq ft) of this space already accounted for.

Of the 4.8 million sq ft we are tracking to be delivered by the end of 2028, 31% (1.5 million sq ft) is to be built in the city centre.

Fitted laboratory rents in Oxford have increased to a new headline rent of £82.50, achieved in Q1 at the Sherard Building on The Oxford Science Park as Oxford Nanopore leased 13,000 sq ft of fully fitted space.

32 Oxford-based life science and biotech firms raised £263 million through fundraisings and grants in H1 2024, reaching 9% above the pre-covid full-year 5-year average. Overall, Oxford-based venture capital was the most consistent out of the Golden Triangle, falling the least from the total raised in 2023.

Despite this, Oxford-based companies have similarly echoed the theme seen across the wider Golden Triangle in their hesitancy to exercise their capital on real estate, with many choosing to remain in their current space until the macro environment settles before expanding or upgrading.

Since 2019, Oxford-based companies have raised £3.4 billion, which will slowly be released as sentiment improves and several tenants that have previously put expansion plans on hold reactivate their search.

London laboratory take up slowed in the first half of 2024 with 10,300 sq ft transacting, 70% below H1 take up last year despite Q1 2024 being 42% above H1 2023 take up (7,300 sq ft). This leasing slowdown can be attributed to the relatively nascent state of the London market and the high quoting rents.

London is the most embryonic of the Golden Triangle markets, so with national and economic unrest and uncertainty over the past year, it has not been able to rely on its deep-rooted and pre-existing markets to the same extent that Cambridge and Oxford have been able to, hence experiencing the impacts of a lack in confidence more heavily.

This was further evidenced in take up by deal size, with all deals occurring for space less than 5,000 sq ft. The largest deal by size occurred at Paper Yard, Canada Water, with Prosemino taking 3,000 sq ft of fully fitted space in Q1.

A further 11,100 sq ft of laboratory space was under offer at the end of June. With additional fitted laboratory space already going under offer early into Q3 we look forward to a positive turn in the second half of the year.

This will further be driven by the 752,200 sq ft of named London laboratory demand, of which 636,200 sq ft is active. Of this demand, 3 requirements are for 50,000 sq ft +, corresponding to 47% of demand, with 28% of demand for space less than 20,000 sq ft, and 26% for space between 20,000–50,000 sq ft.

Science & Technology Report: Golden Triangle - Q2 2024 

5 Things You Need to Know About Offices, Science & Technology in Cambridge

Take up of lab and office space in Cambridge reached 202,700 sq ft in Q1, the highest Q1 on record, and a 43% increase on the 2023 opening quarter of 141,700 sq ft.

Lab take up alone reached 51,400 sq ft in Q1, the highest opening quarter for lab take up in Cambridge to date - c.4.5 times on Q1 2023 of 11,500 sq ft, and 7.5 times on the Q1 5-year average (2019-2023) of 6,800 sq ft.

Lab take up was dominated by Welbeck Health Partners taking 31,000 sq ft at Howard Group’s Unity Campus as shell and core space on a 30-year lease, and ViaNautis securing 10,800 sq ft of fully fitted labs at Cadence, also at Unity Campus, for a term of 10 years.

In terms of demand, we are tracking 708,000 sq ft of named lab demand in the market, of which 483,500 sq ft is for live, active requirements. Of this total named demand, 72% of requirements are for space smaller than 30,000 sq ft, and 31% for less than 10,000 sq ft. This breakdown reflects an increased number of smaller lab requirements, a theme we are seeing across the Golden Triangle, but it is important to note that Cambridge does currently have more 50,000+ sq ft requirements than either Oxford or London, with four 50,000+ sq ft active lab requirements alone - a testament to its more established market.

Lab activity remains constrained, with just 97,000 sq ft of up-and-built lab space available at the end of March, the majority of this being located within the southern Cambridge cluster – notably Babraham Research Campus, Granta Park, Unity Campus, and Chesterford Research Park. With current interest being expressed on some of the space, the supply-demand imbalance will maintain upward pressure on rental levels during the course of the year.

Additional lab supply totalling 190,000 sq ft is on track to be delivered over the next nine months, with the completion of 1 Granta Park by BioMed Realty and the refurbishment of the former AstraZeneca building at 310 Cambridge Science Park. Interestingly, two office-to-lab conversions will also come on stream – Longfellow’s re-purposing of the first building at CamLIFE and the conversion of a 2 storey office at 316 Cambridge Science Park into a 50:50 lab:office. 

Following the completion of 1 Granta Park, Mission Street's 60,000 sq ft second phase of The Press at Foxton will be delivered at the end of the year and Abstract’s South Cambridge Science Centre will provide brand-new purpose-built lab space in Cambridge, delivering 138,000 sq ft by Q2 2025.

There has been a decrease in venture capital received by life science and biotech companies in Cambridge this quarter, with £58 million raised, down 68% on £180 million, the average raised across each quarter last year. Despite the venture funding slowing in the past quarter, these raises will still positively add to the growing pool of capital waiting to be deployed into the market once macroeconomic conditions settle further and confidence grows.

The office market led transactions in Q1, making up 75% of take up and totalling 151,300 sq ft, with most deals falling into the opening quarter after being under offer at the close of last year. This represents a 16% increase on recorded take up for the equivalent period in 2023 of 130,200 sq ft, and 73% above the Q1 5-year average (2019-2023) of 87,500 sq ft.

The two largest deals of the quarter occurred at Cambridge Science Park as AMD took the assigned 44,600 sq ft Napp Pharmaceuticals lease at Building 196, and Cambridge Mechatronics signed for 21,000 sq ft at Building 306 on a 10-year term. Further at the park, Pragmatic Semiconductor expanded by 13,700 sq ft within Building 400 to now occupy the whole building for a 10-year term.

Other notable deals include Power Integrations leasing 14,400 sq ft at Orchard Street’s Radio House for 10 years, and Five AI taking 5,500 sq ft at Fora, 20 Station Road at a rent of £100.00 per sq ft all-inclusive.

Demand for offices continues albeit at a more subdued rate compared to the science and tech sectors, with named demand tracked at 339,000 sq ft. Of this demand, 91% of requirements are for spaces smaller than 30,000 sq ft, with 61% for spaces less than 10,000 sq ft with much of the demand for small suites centred on the key city centre locations on Hills Road and Station Road. Occupier downsizing and the flight to quality are still very much continuing trends throughout Cambridge.

This quarter, overall office vacancy reached 7.6%, with 572,700 sq ft of office space* available across Cambridge, down from 8.8% last quarter. 60% of availability was in the North Cambridge cluster, with the Crown Estates’ Building B and Newnham House at Cambridge Business Park offering 42,500 sq ft and 42,900 sq ft of Grade B office space, respectively. 

There was 215,800 sq ft of Grade A office space* available at the close of Q1, equating to a 2.9% vacancy rate, remaining in line with last quarter. City centre Grade A supply remains tight with only 107,900 sq ft available at Brydell’s Generator on 42 Newmarket Road, 10 Station Road, Fora at 20 Station Road, and Brooklands, which completed this quarter, with 28,000 sq ft already pre-let to Siemens.

According to DTRE Research, the 5-year average quarterly average Grade A office take up (2019-2023) stands at 74,500 sq ft. With just 215,800 sq ft of available Grade A office space in Cambridge, there is under nine months of Grade A office supply remaining.

Despite strong activity on the occupational front, there were no investment transactions for offices and labs across Cambridge in Q1.

The themes we identified at the close of 2023 are still in play, where negative sentiment still surrounds the shifts in working practices, hesitancy due to macroeconomic conditions continues to linger, despite the UK economy appearing to turn a more positive corner, and planning challenges across Cambridge persist.

In the office market, we are seeing the dislocation of investor sentiment with the market facts. We are recording strong fundamentals, with demand remaining strong, take up reaching 73% above the Q1 5-year average, and low supply figures helping to push the rental tone. In light of the above, we are anticipating yield compression once investor sentiment recognises these positive messages. We do remain hopeful for a more active rest of the year but believe this switch will truly come into play at the start of next year.

Despite the lack of historic transactions for up-and-built lab buildings, we are confident in a more positive second half of 2024 for the science and technology capital markets, as we expect the trading of the first stabilised lab buildings in Cambridge to occur. The lack of this product in the market should attract strong investor demand and will inject confidence into the science and technology market.

Office, Science & Technology Cambridge Market Report – Q1 2024

In Q4 alone, combined lab and office take up in Cambridge reached 243,700 sq ft, lifting total
annual take up to 673,300 sq ft, 16% above the 5-year average. For space over 10,000 sq ft, lab
take up exceeded office lettings by 6.4% (15,000 sq ft), a first for the market.


Named tenant demand for lab space cooled to 790,000 sq ft by the end of the year from
880,000 sq ft in Q3. However, with just 86,500 sq ft of up-and-built bespoke available lab space,
the supply-demand imbalance remains prevalent in the market.


Office take up, whilst ahead of 2022 totals, was restricted by the absence of larger transactions,
with just four occurring for space between 20,000 and 50,000 sq ft. In the absence of larger
deals, the flight to quality over quantity was the key theme in the market, as changes to work
practices continue to see the release of excess space and the transacting of smaller but higherquality product.
Shifts in working practices and other factors have continued to contribute towards negative
investor sentiment surrounding offices, helping to hold back transactional volumes in 2023, with
just £153 million* of deals completed across the office, science, and technology sectors.

Lab take up was strong in 2023, with total take up reaching 282,000 sq ft despite severe
supply constraints across the Cambridge market.

In total, there were nineteen lettings in 2023, up 161% on the 5-year average from 2018-2022, the
highest recorded take up of labs in Cambridge.


The second half of the year saw an uplift in leasing activity with the 85,000 sq ft letting to BioNTech
at 1000 Discovery Drive in December. Of the eleven deals for space over 10,000 sq ft, this was the
only letting above 30,000 sq ft.

This is reflected in the requirement schedules as 67% of the 790,000 sq ft of named demand is
for space below 30,000 sq ft.


Another continuing trend across 2023 was the letting of new or refurbished bespoke wet labs
whilst still under construction. Six of the eleven deals for space over 10,000 sq ft followed this
trend, including the complete letting of 1000 Discovery Drive at the Cambridge Biomedical Campus
to BioNTech (85,000 sq ft) and the NHS (23,100 sq ft); B960 at Babraham Research Campus,
comprising of 36,000 sq ft, wholly let to three tenants at headline lab rents of £66-68.00 per sq ft
before completion; and Domainex, advised by DTRE, committing to 24,300 sq ft at £46.00 per sq
ft in Building A2, Unity Campus.


These deals support the established themes identified in the Cambridge market where the supplydemand imbalance is increasing pressure on available supply, resulting in new supply being prelet or accounted for before practical completion. 


2023 also saw BioMed Realty pre-let 24,800 sq ft of shell and core lab space at One Granta Park
to T-Therapeutics, with good interest on the remainder of the space, as well as signing 21,000
sq ft at the Franklin Building also on the park to F-Star (invoX) for two years, with the existing lab
space taken as is.

In terms of supply, there was 86,500 sq ft of up-and-built bespoke lab space available to
lease at the close of 2023, consisting of 55,000 sq ft of ex-AstraZeneca space at Milstein,
Granta Park, 16,000 sq ft at Phase II Unity Campus, and 15,500 sq ft at Phase I The Press,
Foxton.


Live demand remains comfortably in excess of supply however pressures should alleviate
slightly with the upcoming completions of 110,000 sq ft at One Granta Park in Q4, 40,000 sq ft at
CamLIFE in Q3, and 22,000 sq ft at 316 Cambridge Science Park in Q2, alongside the release of
58,600 sq ft of ex-AstraZeneca space at 310 Cambridge Science Park, also in Q2.


Looking to Q2 2025, Abstract Securities will complete on the largest speculatively built laboratory
building currently under construction in Cambridge. The South Cambridge Science Centre will
comprise of 138,250 sq ft of highly flexible, high quality lab space.


The mid-tech market, however, will see continued stress on supply, with only 151,700 sq ft at
Bourn Quarter Phase II due to be delivered in 2024. Mid-tech is becoming more of a feature
of the market as developers realise the benefits of providing buildings that can accommodate
a diverse range of manufacturing, lab-enabled offices, and GMP space. The provision of a
more flexible offering attracts a broader range of science, tech, and more traditional industrial
occupiers. Accelerator Park in Sawston will build on this momentum by delivering three mid-tech
and R&D buildings comprising 86,300 sq ft in 2025.

Against the backdrop of low supply, the prime headline lab rent in Cambridge remains £71.00
per sq ft, achieved when Charm Therapeutics took 13,600 sq ft at Babraham Research
Campus in Q2. In the same quarter of 2020, Bit Bio set a rent of £43.15 at Babraham Research
Campus, reflecting a 65% rental uplift and an annualised compound growth rate of 18%.

Total office take up in 2023 reached 391,000 sq ft, a 13% increase on 2022’s levels. Despite
this increase, office leasing remained restricted by flexible working ongoing from the peak of
the coronavirus pandemic, falling 17% below the 5-year average (2018-2022).


Of the total, 46% (181,000 sq ft) was for Grade A space, headed by Samsung taking 33,600 sq
ft at One Cambridge Square for 10 years at a headline rent of £38.50 per sq ft, and Raspberry
Pi taking an assignment of the 30,000 sq ft former CMR space at 194 Cambridge Science Park.


Grade A leasing activity remained restricted by a lack of high-quality up-and-built available
space.

There was just 215,100 sq ft of Grade A office space available over 10,000 sq ft at the end
of 2023, with a vacancy rate of 2.9%, further evidencing the demand for top-quality space.


The total availability of office stock over 10,000 sq ft reached 661,600 sq ft at the close of 2023,
reducing the total vacancy rate for all grades to 8.8%, from 9.5% at the end of Q3.


DTRE identified the trend of increased lettings occurring for smaller spaces. Across 67 deals,
82% were for space from 0-10,000 sq ft, 12% in the bracket of 10-20,000 sq ft, and 6% occurred
for space between 20-50,000 sq ft. There were no leasing deals over 50,000 sq ft in 2023.

Occupiers are taking smaller but high-quality spaces as they focus on the quality of the real
estate to attract employees back to the office following the pandemic-enhanced work-fromhome culture.


Despite these pressures on supply, the year ended with a significant amount of office space
under offer – over 142,500 sq ft, of which 67% is Grade A space, reiterating the flight to quality
narrative that DTRE are hearing from occupiers. 


Looking to 2024, we will see the completion of M&G and Wrenbridge’s 68,000 sq ft development,
Brooklands, alongside the delivery of 10 Station Road which will provide 50,400 sq ft by the end
of the year. At the close of 2023, demolition works were also underway as part of Railpen’s
Botanic Place development that will build two office blocks totaling 500,000 sq ft of workspace.

Continued pressures on Grade A space with the flight to quality and ESG pressures on
businesses will encourage the leasing of these new developments, evidenced by Brooklands
already being 41% pre-let.


In addition, we can expect demand for office space to increase through 2024 as companies
continue to solidify their return-to-office plans and incentivise in-office work through their real
estate offerings. 

Investment into the office, science, and technology sectors across Cambridge reached £153
million* in 2023, falling 78% behind the £681 million transacted at the end of 2022.


Transactions were restricted by negative sentiment surrounding shifts in working practices,
increases in material and construction costs, high interest rates, yields continuing to move out, and
planning challenges.

Whilst down on investment volumes seen across 2021 and 2022, the total does remain 25%
above the pre-COVID 5-year average from 2015-2019. Furthermore, there was £60 million
under offer going into 2024 which, if completed in Q1 2024, would be over £40 million ahead
of Q1 2023. 

The biggest deal of 2023 saw UBS purchase an existing office building on a 5-acre site at
Westbrook Drive for £75 million, which will be repositioned as an urban laboratory campus.
Canmoor and Tristan Capital acquired four assets and development land at Dales Manor Business
Park, in the years 2nd biggest deal. Advised by DTRE, the 130,100 sq ft park was purchased for
over £27 million, with an underlying science and technology/mid-tech repositioning opportunity.

£720 million of venture capital funding and grants was raised by 108 Cambridge-based Life
Science and BioTech companies in 2023, 36% on the total raised in 2022, and 13% on the 5-year
average.

 72% of this total (£515 million) was raised in Q3 2023 alone, with Apollo Therapeutics
raising over £180 million in the largest Cambridge-based fundraising of the year.


To date, there has been a lack of transactions for up-and-built laboratory buildings to provide
evidence of prime yields in the sector. With positive venture capital investment into the sector,
moving into the second half of 2024 we expect the first newly built up-and-let laboratory buildings
to trade. Given the lack of ‘best in class’ laboratory stock to come to market to date, we anticipate
strong investor demand for this product, which will in turn secure strong pricing, building confidence in the science and technology investor market. 

Office, Science & Technology Cambridge Market Report – Q4 2023

Office and laboratory take up in Cambridge reached 173,000 sq ft this quarter, a notable 47% uptick from Q2’s levels, driven by office transactions. 

Tenant demand for the office, science and technology sectors remained unsatisfied this quarter, with the lack of up-and-built laboratory and Grade A office space continuing to persist. 

Combined office and laboratory investment volumes reached £139 million at the end of Q3, 14% above the 5-year full-year pre-pandemic average of £122 million, despite rising construction costs and softening yields. 

Q3 witnessed Life Science ad Bio-Tech firms raise £515 million through fundraising and grants, an increase of £430 million (513%) on last quarter. Whilst VC fundraising activity is occurring, from discussions with occupiers it is taking noticeably longer to close the raises, as well as the macroeconomic factors adding to increased occupier sentiment of the importance of capital conservation.

Laboratory take up this quarter reached 40,000 sq ft, c.20,000 sq ft behind the previous quarter.


The letting of the latest new development at Babraham Research Campus, Building 960 by
BioMed Realty, has accounted for 89% of total laboratory take up this quarter. 

The 34,000 sq
ft fully fitted wet laboratory to complete in the opening quarter of 2024 has been pre-let
to three occupiers. 

The largest of the lettings was Insmed taking 17,700 sq ft, followed by Xap
Therapeutics leasing 10,200 sq ft, as well as Mosaic Therapeutics, a graduate of the Research
Campus’ start-up programme, Accelerate@Babraham, taking the remaining 6,700 sq ft.


Despite a lower overall take up compared to last quarter, these transactions highlight the
continued presence of demand for fitted laboratory space as the latest lettings at Babraham
reflect rents in the range of £66-68 per sq ft for fully fitted labs, based on 5-year leases.

The prime rental level at Babraham Research Campus was £43.15 per sq ft 36 months ago,
reflecting a rental growth uplift of 65% and a compound annual growth rate of 18.06%,
supporting the sentiment that occupiers are happy to pay rents at a competitive level
following the new prime laboratory rent set at the campus last quarter of £71.00 per sq ft. 

Low take up can be attributed to the running theme of the 882,000 sq ft of active laboratory
demand not being fulfilled by current supply. There are only 2 new laboratory developments
currently under construction to complete by the end of the year, 1000 Discovery Drive and Phase
2 Unity Campus. 

Of the c.200,000 sq ft to complete, 70% is already leased or under offer.


Abstract Securities have just broken ground on a new speculative lab building at the South
Cambridge Science Centre in Sawston. At 138,250 sq ft it is the largest speculatively built
laboratory building currently under construction in Cambridge and will provide highly flexible,
high quality laboratory space to foster collaboration and innovation, reaching completion in Q2
2025.

Life Science and Bio-Tech companies in Cambridge have raised £678 million this year to date
through 83 raises and grants.

 £515 million was raised in Q3 alone by key fundraisings including
the two largest fundraisings this year to date by Apollo Therapeutics Limited and CMR Surgical,
raising over £180 million and £133.8 million respectively.

Office take up across Cambridge in Q3 reached 131,000 sq ft, equating to 76% of combined
office and laboratory take up and surpassing Q2’s office transactions by over 76,000 sq ft
(139%).


Take up has focused on the serviced office/flex space, with the largest deal of the quarter being
the serviced office operator, Mantle Space, taking and adapting 22,600 sq ft of former Invenia
Labs fitted office space by way of assignment at 95 Regent Street, CB2. In the Cambridge North
cluster, Newflex has leased 18,300 sq ft at One Cambridge Square near Cambridge North rail
station to develop into serviced office space in one of the largest deals this quarter.


The new FORA serviced offices building at Station Road in the city centre also opened its doors
during the summer and is steadily filling up, providing competition to the existing WeWork centre
at 50/60 Station Road.


There was 163,500 sq ft of office space under offer in the northern cluster and city centre by
the close of the quarter, a substantial amount driven by the 484,000 sq ft of DTRE-tracked
demand, influenced largely by displaced occupiers coming out of buildings that are to be
redeveloped.


Q3 also followed the previously identified trend of the increase in deals occurring for smaller
spaces, and the decline in larger-sized deals. With 19 office deals completing this quarter, 14
agreed leases were within the 0-10,000 sq ft size bracket. Furthermore, just one deal occurred
between 20-50,000 sq ft, and no deals were recorded for leases above 50,000 sq ft.

By the end of the quarter, the overall office vacancy rate across Cambridge was 9.5%, but
only 3.3% for new or modern Grade A offices, down from 4.1% in Q2.


One Cambridge Square is the only new office development in the northern cluster and is already
65% let. There are two new developments under construction in the city centre, 68,000 sq ft
of space at Brooklands which is 41% pre-let, and 10 Station Road, the latest addition to the CB1
office quarter, which will deliver 50,440 sq ft by the end of 2024.
Despite overall available office space in Cambridge rising by 44,000 sq ft (6.6%) since last
quarter, it is due to the release of occupier space as corporates continue to rationalise their office
portfolios in response to changing working practices and the development of the work-fromhome culture.


We are confident that much of this available space will be soaked up by the increase of
tenants in the market and from the continued pressure on Grade A space as the flight to
quality, over quantity, persists.

Canmoor and Tristan Capital, advised by DTRE, have purchased a cluster of four buildings and
development land assets at Dales Manor Business Park. Sold by Warehouse REIT, the 130,049 sq
ft park was purchased with an underlying science and technology repositioning angle for £27.25
million.

Investment into the office, science and technology sector across Cambridge has reached
£139 million so far this year.

 Whilst down on the surges of investment seen in the previous two
years as investment flew in due to the pandemic, if the £88 million of space that is currently
under offer comes through by the end of the year, investment volumes will reach £227
million, 86% above the pre-covid 5-year average (2015-2019).

Increases in material and construction costs, affected by inflation, alongside planning constraints,
and yields continuing to move out, have supported the wake of the pandemic in restricting
volumes so far this year.


At the close of Q3, the search to recapitalise large schemes continued on from H1 , with
several £100 million in development funding opportunities available for the office, science and
technology sector in Cambridge. Brockton Everlast offers the largest opportunity in its search for
a Cambridge Science Park partner at over £300 million.

Despite the dip in investment volumes compared to the previous two years, we anticipate the
market bouncing back, supported by the continuous strong demand in the golden triangle
alongside the re-emerging confidence in buyers as the VC tap continues to flow.

Office, Science & Technology Investment & Leasing Cambridge Market Review – Q3 2023

Simon Glenn and Matt Smith are joint heads of DTRE’s Science and Technology team.
The UK is in a global race to attract and retain the science and technology innovators of the future. And, despite the grand claims of some politicians, it still lags some way behind.

To become a ‘science and technology superpower’ – with cutting-edge sectors capable of driving the country’s economic future – much more needs to be done to ensure we are building an environment that breeds confidence for investors and in which businesses can thrive.
One (often overlooked) piece in this puzzle is meeting the increasingly pressing demand for specialist physical spaces and the needs of the investors and developers that can provide them. Regulation and skills mean nothing without the mission critical infrastructure required to allow occupiers to do what they do best.

In a recent trip to Boston, the DTRE Science and Technology team had the opportunity to experience in-person what exactly these specialist spaces, at scale, can look like. Greater Boston is the leading science and technology hub in the US, with GEN reporting 55.9 million square feet of existing inventory.

Science & Technology Market Intelligence

Science & Technology Report: Golden Triangle - Q3 2024

America's life sciences woes won't infect the UK market

Science & Technology Report: Golden Triangle - Q2 2024

Office, Science & Technology Cambridge Market Report – Q1 2024

Office, Science & Technology Cambridge Market Report – Q4 2023

Office, Science & Technology Investment & Leasing Cambridge Market Review – Q3 2023

Delivering Spaces Fit For Britain’s Future

Office, Science & Technology Investment & Leasing Oxfordshire Market Review – Q2 2023

Office, Science & Technology Investment & Leasing Cambridge Market Review – Q2 2023