From test tubes to tech in Cambridge

Mark Taylor is annoyed and, EG is sorry to say, it’s at least partly the fault of the press. The director and head of business space in the Cambridge office of Savills has grown tired of stories about the city dwelling on its life sciences market to the exclusion of other sectors. Taylor wants to talk tech.

“I think the press tends to distort the Cambridge market by believing that Cambridge is all about test tubes and life science, when in fact its historical base is more about R&D and technology,” Taylor says. “I get somewhat frustrated the way the way the general coverage of Cambridge almost ignores the fact that it has a very strong R&D tech history, particularly in the AI sector.”

Taylor points to big leasing deals such as US streaming company Roku and software group Mathworks each taking space at Cambridge Science Park, without a test tube in sight.

Taylor’s fellow guests on the latest EG Cities podcast agree – for too long, Cambridge has been talked of as a one-industry success story.

“’Knowledge-intensive’ is the phrase that we typically use for high skilled businesses around here, and they are diverse,” says Claire Ruskin, executive director at Cambridge Network. “That diversity, the cross-sector work that we do, has been our strength in Cambridge. It supports agile growth even through pandemic times. It’s not just about life sciences – that’s very important – but it’s really important that life sciences joins with the AI businesses, with the tech businesses, with the communications businesses.”

The draw of the office

A regular jet-setter, Savills’ Taylor is now looking at how Cambridge is positioning itself against rivals not only in the UK, but also overseas. The good news? He likes what he sees.

“I’ve been to San Francisco 31 times in the past 20-odd years,” he adds. “Each time I’d go, I’d come back enthused, frustrated, thinking there’s so much business still to flow this way. This [most recent] time I came back rather sad because San Francisco has really gone off the edge of a cliff in terms of appalling homelessness. The downtown market, the city centre, the core areas where you’d go and meet clients are deserted.

“The same could be said of Boston – the downtown markets are deserted. The life sciences sectors are back in because you can’t work at home with a test tube, and the hardware sector, they’re in – software are still working from home. We [in Cambridge and the UK] are way ahead in terms of people back in the office and having buzzing downtown markets.”

The real estate industry has pushed to ensure properties are keeping up with what various industries need, Cambridge Network’s Ruskin says. “The science park has gone from single-storey shacks in the early days to multi-storey, grand buildings with facilities. And the Station Road environment, with which we attract a lot of people in from London to work in Cambridge, has gone from Victorian houses to multi-storey with a dense population,” she adds.

But there are still companies crying out for more. For TusPark UK, an arm of the Chinese science park operator that has invested in Cambridge Science Park, those deals for Roku and Mathworks were among the largest deals yet done in the city. Wei Meng, head of innovation and director of operations, says the city’s supply and demand imbalance has kept the pressure on fast-growing companies that need to secure space.

“When units one and two at Cambridge Science Park became available to the market, those are probably the only ones around that 100,000 sq ft [size],” Meng says. “So for the likes of Mathworks and Roku, which back then were scaling up, those were pretty much the only options. There is clearly a shortage of supply in the market. There were also quite a few transactions in the market during the past year and yields have been driven down a lot – offices to [about] 4.25%. That tells you from a numbers point of view, what’s going on.”

Join the waiting list

Spades are now getting in the ground, and Taylor thinks the eventual schemes in the pipeline will turn the current imbalance around.

“Cast your eye out two to three years, it looks rosy – potentially, dare I say it, oversupply,” he says. “It’s always very hard to judge as to the level of consumption or need for corporates. But if I was going out looking today and I knocked on James’s door, he would tell me I’ve got a three-month waiting list.”

That James is James Parton, managing director of the Cambridge Science Park-based Bradfield Centre, a tech-focused co-working offering. “We’re seeing a real surge in demand from start-ups in the area,” Parton says. “There’s been a real positive demand for, in particular, flexible space. That suits start-ups very nicely in terms of that uncertainty in their growth. Having a flexible offer allows them to scale as and when they find success and as and when they raise capital.”

Parton adds: “From an occupancy perspective, we are 100% full. However, we don’t have the same amount of footfall on a daily basis in the building. That goes back to companies thinking about which days of the week they’re coming in and spreading their people throughout the week in the office – just having a slightly more flexible approach to working.”

But some days are better than others. If further anecdotal proof were needed of that positive demand, look no further than the fact that TusPark’s Meng – who is based in the Bradfield Centre – has been unable to book a meeting room to dial in to EG’s discussion. Instead, he has hunkered down in one of the phone booths for tenants. For Cambridge’s landlords and developers, a struggle to find an empty meeting room is a good problem to have.