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Greater Cambridge Employment Land and Economic Development Evidence Study

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Greater Cambridge Employment Land and Economic Development Evidence Study Greater Cambridge Employment Land and Economic Development Evidence Study South Cambridgeshire District Council and Cambridge City Council November 2020 Prepared by GL Hearn 65 Gresham Street London EC2V 7NQ With Iceni Projects Ltd Final Report Greater Cambridge Employment Land and Economic Needs Study Contents EXECUTIVE SUMMARY 4 1 INTRODUCTION 13 2 GREATER CAMBRIDGE PROPERTY MARKET 14 3 ECONOMIC CLUSTERS IN GREATER CAMBRIDGE 54 4 GREATER CAMBRIDGE EMPLOYMENT LAND SUPPLY ASSESSMENT 76 5 EMPLOYMENT FORECASTS TO 2041 88 6 EMPLOYMENT FLOORSPACE REQUIREMENTS 96 7 BALANCE OF FLOORSPACE NEEDS 114 8 REVIEW OF ECONOMIC DEVELOPMENT POLICIES AND ISSUES 120 Appendices APPENDIX A: EMPLOYMENT FORECASTING MODELS 139 APPENDIX B: EMPLOYMENT RATES – SOUTH CAMBRIDGESHIRE AND CAMBRIDGE CITY 164 APPENDIX C: GROWTH SECTORS 1991-2017 166 APPENDIX D: FULL TIME EQUIVALENT CONVERSION 171 APPENDIX E: LAND USE CLASSIFICATION OF SECTORS 173 APPENDIX F: PROVIDERS OF FLEXIBLE WORKSPACE IN GREATER CAMBRIDGE 174 APPENDIX G: NPPF AND PPG REQUIREMENTS 176 APPENDIX H: SUMMARY OF LAND AVAILABILITY IN GREATER CAMBRIDGE 177 GL Hearn Page 2 of 191 Greater Cambridge Employment Land and Economic Needs Study Quality Standards Control The signatories below verify that this document has been prepared in accordance with our quality control requirements. These procedures do not affect the content and views expressed by the originator. This document must only be treated as a draft unless it has been signed by the Originators DATE ORIGINATORS APPROVED and approved by a Business or Associate Director. November 2020 David Leyden Matt Kinghan Strategic Planner, GL Hearn Director, Iceni Projects Limitations This document has been prepared for the stated objective and should not be used for any other purpose without the prior written authority of GL Hearn; we accept no responsibility or liability for the consequences of this document being used for a purpose other than for which it was commissioned. GL Hearn Page 3 of 191 Greater Cambridge Employment Land and Economic Needs Study EXECUTIVE SUMMARY 1.1 GL Hearn with SQW Ltd and Cambridge Econometrics and supported by Iceni Projects Ltd and Justin Gardner Consulting was appointed by South Cambridgeshire District Council on behalf of both South Cambridgeshire District Council and Cambridge City Council (represented by the ‘Greater Cambridge Shared Planning Service’) to review the economic development and employment land needs of South Cambridgeshire District and Cambridge City (the ‘Greater Cambridge’ area) to 2041. 1.2 The data collection and analysis for this report was largely produced in Autumn / Winter 2019 prior to the COVID-19 pandemic. As a result, the underlying data reflects a position prior to any implications of COVID-19. It is recognized that further updates may be required in due course when the medium-term implications, if any, are clearer in relation to employment land and economic development in the Greater Cambridge area. 1.3 Furthermore, the implications of the change to the Use Class order including Class E are not considered in detail but this new class is recognised as being necessary to include in the Local Plan making process. 1.4 This executive summary considers the key findings and recommendations of the report. Property Market Offices 1.5 The latest data from the Valuation Office Agency (VOA) show that Greater Cambridge has approximately 907,000 sqm of office floorspace. Cambridge has 366,000 sqm of floorspace, or 40% of the Greater Cambridge floorspace. South Cambridgeshire has 541,000 sqm of floorspace, or 60% of the Greater Cambridge floorspace. 1.6 Greater Cambridge’s office stock saw growth of 41% to 907,000 sqm between 2000/01 and 2018/19. Cambridge experienced a decline of 2% whereas South GL Hearn Page 4 of 191 Greater Cambridge Employment Land and Economic Needs Study Cambridgeshire experienced a 107% increase in office stock, much higher than the national and regional rate. 1.7 There are supply pressures for small to mid-sized office occupiers in the city core, particularly between 1,000 to 5,000 sqft (around 100 to 500 sqm). There is also demand for this bracket and larger floorspace in North East Cambridge including the Science Park. Industrial 1.8 Cambridge has 244,000 sqm of industrial floorspace, or 21% of the Greater Cambridge floorspace. South Cambridgeshire has 901,000 sqm of floorspace, or 79%. Since 2000/01, South Cambridgeshire has experienced a 23% increase in industrial stock whereas Cambridge has experienced a decline of 33%. Losses in the city have therefore been offset by gains elsewhere. Overall, Greater Cambridge has seen a 5% growth in industrial floorspace over the 2000/01 to 2018/19 period. 1.9 In the city, industrial rents have increased considerably in recent years. This was explained by reduced industrial floorspace meaning supply is unable to meet demand. Trade counters are more likely to achieve higher rents compared with smaller industrial occupiers. Labs 1.10 Across Greater Cambridge, an average of 42,000 sqm of R&D floorspace was transacted annually from 2012-2018, with around 53 deals per annum, mostly in North East Cambridge (29) and South Cambridgeshire (20). Deals in North East Cambridge were concentrated in the lower size bands compared to South Cambridgeshire which included some large floorspace transactions. 1.11 Demand is high for wet labs, as space is highly specific, and companies seek flexible high quality floorspace, although the market is bringing forward more floorspace. Dry lab space, as with office, sees high demand in the North East Cambridge area with smaller firms taking space outside of the city in response to high city rents. GL Hearn Page 5 of 191 Greater Cambridge Employment Land and Economic Needs Study Clusters in Cambridge Life Sciences 1.12 Life sciences is a key sector for the study area. Significant concentrations are found at Addenbrooke’s Hospital and Cambridge Biomedical Campus on the southern edge of city. Further out, there are major centres across the south and south east of South Cambridgeshire including Babraham Research Campus, Wellcome Trust Genome Campus (Hinxton), Granta Park (Great Abington), Sagentia Research Park (Harston) and Melbourn Science Park. Other key hubs include Cambridge Research Park (Landbeach) to the north of the city, and St John’s Innovation Park and Cambridge Science Park at the north east edge of Cambridge. 1.13 Whilst there are benefits of connecting directly or being located close to research centres, there is also evidence of businesses operating successfully in new, accessible locations. 1.14 The sector should continue to see growth. There are some local challenges to keeping up with demand for both wet and dry lab space, albeit there is additional floorspace coming forward including at the Genome Campus (Hinxton), Cambridge Biomedical Campus, Cambridge Science Park and Granta Park (Great Abington). Leases should be encouraged to be more flexible along with floorplate sizes allowing firms to change and grow as they develop through their life cycle. ICT 1.15 Firms in this sector require office / dry lab space and are distributed either in Cambridge City Centre and near Cambridge Railway Station, or clustered around established business parks, such as Cambridge Business Park and Cambridge Science Park, Cambridge Research Park (Landbeach) and Cambridge Innovation Park (Waterbeach), St John’s Innovation Park, and Cambourne Business Park (to the west of Cambridge). 1.16 ICT businesses are less likely than those in other sectors to have specific locational requirements, notwithstanding the concentration in North East Cambridge, but they GL Hearn Page 6 of 191 Greater Cambridge Employment Land and Economic Needs Study do benefit from clustering with other like-minded firms and near the railway stations giving access to London. 1.17 ICT employment has seen positive growth in recent years through the rise of Artificial Intelligence, big data and other e-services. There has been a period of inward investment in Cambridge, particularly at CB1. A general lack of appropriate labour may be a challenge to future growth. Professional Services 1.18 This sector requires traditional office space and typically follows the same distribution as ICT due to strong linkages with knowledge intensive sectors. Key locations include the area around Cambridge Railway Station, North East Cambridge, Cambridge Research Park (Landbeach) and established research parks across South Cambridgeshire. As with ICT, there are strong growth prospects. Advanced Manufacturing 1.19 Despite a broader decline in manufacturing, the advanced manufacturing sector in Greater Cambridge has stayed competitive due to connections with research and knowledge intensive sectors. Specific clusters are in Waterbeach, Cottenham and Bar Hill, and additionally Sawston, Hinxton, Duxford and Melbourn. 1.20 Advanced manufacturing is varied and takes many forms. In life cycle terms, it may only require office space at first but will quickly adapt to requiring dry lab / manufacturing floorspace. Advanced manufacturing has greater emphasis on the type of space required and less on a specific location compared to other sectors. Employment land supply 1.21 Site visits were conducted at 71 employment sites. The purpose of the site visits was to explore the attractiveness to the market, identify available or vacant floorspace and opportunities for development including vacant land and the potential for redevelopment or intensification. Recommendations were provided
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