COMMENT Scientists, technologists and entrepreneurs across the Oxford-Cambridge Arc helped innovate the UK through crisis last year. Without their rapid drug discovery and groundbreaking vaccination development of recent months, we would all still be locked up at home doing keep-fit in front of YouTube videos.
Instead, we’re now embarking on one of the most ambitious economic growth projects we have seen since the London 2012 Olympics. At the end of next year, the government plans to implement a spatial framework for the region stretching from Oxford to Cambridge and encompassing 10 leading higher education facilities and some world-renowned science and technology research centres.
In simple real estate terms, this is truly a one-off opportunity. But the government knows it cannot deliver on its own, just as it did during the height of the pandemic. Investors, developers and local leaders must now take a lead from the Arc’s true innovators and collaborate to fully harness the area’s enduring appeal to create something truly special, investable, deliverable and suited to the much-changed world that we are about to live in. Where else in the UK is there the opportunity to do that?
Step change in appetite
The past 18 months have seen a step change in investor interest. Global funds and instructions are lining up to pour money into the Arc’s high-performing city economies as the pandemic response shines a light on our world-renowned life sciences sector.
Bidwells’ Arc Investment Report, published in June, revealed that total investment activity across the Arc reached almost £2.4bn in 2020, a record for the region and 56% ahead of 2019.
We now estimate that there is £5bn of global capital seeking a home in the Arc, and our latest occupational research shows that, across the Arc, office and lab take-up during the first half of this year was already at nearly two-thirds of the 2020 total.
These are mind-boggling numbers when you think of where we were in March last year. Rapid growth in venture capital investment in life sciences, AI, genetics and robotics continues to draw global talent to places such as Oxford, Cambridge and Milton Keynes – locations that already had reputations for strong and safe returns.
Long before the pandemic struck, the Arc had begun to mature into something much bigger than just Oxford and Cambridge, with clusters evolving across the region, and not just in life sciences, but in a whole stream of converging technologies and scientific breakthroughs. Oxford, Bicester, Milton Keynes, Bedford and Cambridge form a west-to-east spine across the Arc and what will become the East West Rail line.
With fast-changing working patterns and evolving shopping habits set to radically change the make-up of all places, not just new ones, this is a watershed moment to direct this post-pandemic investor interest into the right places, show progress on setting the framework for growth and get the large-scale projects imagined off the ground, in a way that really excites the industry and, crucially, the public.
An expert panel has been appointed by the government to provide advice on placemaking in the Oxford-Cambridge Arc, with its focus on the area between Bedford and Cambridge, where the government has already committed to explore the case for new or expanded settlements including those linked to potential East West Rail stations. British Land’s Emma Cariaga will chair it. When Emma and I met recently, we agreed that success would only come when my son and her daughter were genuinely excited by it all.
“The new towns of the past are not going to get young people going,” Emma said. “My hope is that the places we create here are about so much more than that. We have a real opportunity off the back of the pandemic to rethink.”
She added: “There is a real blurring of the lines now between living and working that young people really get, which I don’t think we have seen before, and the climate change agenda really resonates too. I want the Arc to be something young people can unite behind.”
Delivering when it counts
There are ambitious environmental aspirations set for the Arc – a 20% biodiversity net gain obligation for any new development and a goal to increase Arc woodland cover from 7.4% to 19% by 2040. There are few who now doubt the importance of green infrastructure and the value of natural capital, but part of Emma’s new role will be to bring some hard-headed commerciality to the process too.
“Government plays a crucial role in pushing sustainability and design standards up, but this thing needs to be investable too,” Emma added. “My role is to stress-test viability, ensuring the projects are actually deliverable and not left on a shelf, contingent on gap funding, which we know is in short supply.”
There is certainly no shortage of firm investor and developer interest in the Arc, but there is still some work to do to galvanise all the interested groups behind a single big idea. The events of both 2012 and 2020 prove to us that it is possible for the UK to deliver when it really counts.
Patrick McMahon is a senior partner at Bidwells
Click here to watch all the coverage from EG’s recent Vision for the Arc event
