Counting the cost of failure
Four part Q&A with Max Bryan, Head of Science & Technology, Bidwells
1. As head of Bidwells’ business space agency team in Cambridge you have a unimpeded view of one of the most attractive UK commercial markets of 2020-21. But where is it headed next?
We now have a dysfunctional supply & demand imbalance in Cambridge, which means that growing businesses just do not have the space to fully realise their growth potential. We’ve got lab demand approaching 1 million sq ft in Cambridge, with no space available, the situation with offices is not as acute but with similar levels of lab demand and only one building of plus 50,000 sq ft being delivered speculatively this year and only one building of more than 50,000 sq ft coming next year.
But that is only one part of the story. Office stock levels in the city have nearly doubled over the last twenty years but housing has not kept up with that growth, so you have economy growing quicker than its infrastructure which, in the end, is going to be an even greater curb on growth and enabling Cambridge scientific research to compete at its best.
Planning is the crucial blocker in all this. Without making a stronger case to local politicians, local people and the wider community around the wider benefits that developing commercial spaces, housing and transport infrastructure we are going to see increasing shortages and inequalities.
There is demand for more employment space but it’s also the housing and wider infrastructure investment which needs to be delivered. We cannot focus purely on one or the other – they are both huge problems and opportunities for the city.
2. Global investors have flooded into the Arc’s clusters during the pandemic. How do they see their long-term investment into the Arc now they are getting under the skin of the area?
The Arc can be the leading life science cluster in Europe. It already is in many ways. It is already delivering world-beating science but it still lags behind the east and west coast of America in terms of scale. In Boston they are delivering more than 6m sq ft this year, but we won’t deliver that in five years across the Arc.
The world wants to invest because they see that the Arc has the potential to be as important as the US centres of innovation but we’re just not enabling them to build quickly enough and at some point that global money will get frustrated and give flight and go elsewhere. This type of capital is patient but for how long? The quality of the buildings global investors are seeking to deliver are going to be ‘best in class’ with impeccable environmental credentials. Positively the rents in Cambridge stack up to deliver buildings with highest sustainability standards. It will be a lost opportunity for Cambridge if we don’t get these schemes on site and have Cambridge and the UK providing leadership on sustainability in the built environment.
3. How do you think infrastructure delivery should be prioritised across the Arc?
We need real estate provision for business, R&D, and logistics, and the soft infrastructure in between. Prioritising one over the other actually creates a bias which slows growth, like we’re seeing in Silicon Valley where office and R&D space has reached a point of saturation.
Decision-makers must weigh considerations around new and existing infrastructure collectively, to strike the right balance in the allocation of limited resources.
At the same time, a lack of commitment to one choice over another can result in stalled growth. At the time of writing, the government’s commitment to physical infrastructure in the Arc rests on shaky foundations. Overpromising on new projects elsewhere in the UK could potentially push upgraded infrastructure in the Arc, like East-West Rail, further down the chain of priority, while the capacity for innovation in the region remains constrained by diminishing office and S&T real estate.
While there is no ‘silver bullet’ to these varied infrastructure pressures, inward investment from the private sector can help ease the reliance on government finance if backed by government intervention. As the contributions herein show, this is not a problem so easily solved through funding alone.
4. There are no easy solutions here but where do you think action needs to be taken to alleviate these issues?
At some point, we've got to get real. We know that the Arc is a national asset in terms of producing revenues for the exchequer and local politicians are currently blocking that growth and preventing companies from investing and developing dare world changing ideas and delivering equitable growth for places like Cambridge. I think local politicians should be held accountable for the cost to the economy, not just in terms of pounds and pence but in terms of the lack of progression in schools, hospitals and other infrastructure. This also has a knock-on effect for households too. This lost revenue to the Arc could have a hugely detrimental impact over the long term to all of us.
Get in touch
Max Bryan
Partner, Head of Laboratory & Office Agency