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Firms think big, but supply is narrowing

Businesses keen to snap up the dwindling supply of larger properties kept the market buoyant throughout the holiday season, says Jeffersons Commercial.

"As soon as Italy lifted the World Cup there was a sudden demand for office space and it hasn't stopped all summer," says Jeffersons Commercial partner Will Mooney.

The greatest competition is for buildings of 20,000 sq ft and above.

"There is an increasing demand for properties but very little available for those wanting self-contained buildings," he says. "Three to five years ago there was no demand for these buildings so they were fragmented into smaller office floorplates. Collectively there is space, but very few larger spaces.

"Consequently rents are firming up: three years ago offices were letting for £16.50 per sq ft, and now it's up to between £21 and £22 on the business parks. And any concessions, such as rent-free periods, have dramatically decreased."

Anticipating this shortfall Jeffersons, in conjunction with joint agents CBRE, advised Capital & Counties to build speculatively two years ago. This resulted in CPC4, a 39,000 sq ft office and R&D facility at the 40-acre Capital Park, three miles south east of Cambridge. Due for completion this month, there is already strong interest from companies wanting to take the whole space and there is also interest in a large space at CPC1.

Mr Mooney says: "With an increasing number of businesses in Cambridge rapidly expanding, this demand for larger premises isn't going to go away. If more companies planned ahead for expansion they could have buildings built to suit their requirements, rather than taking on various smaller buildings, or moving out to the fringes."

Cambridge Evening News - Commercial Property supplement, page 3, 5th September 2006