It’s been a bit of a mixed Spring so far, just when you think Summer is around the corner we get by a series of Atlantic lows (as they’re called on the bulletin) when it might almost be Winter again. Our economy sometimes seems to be a bit like that too.
First, some good news (although not a surprise) is that the Wellcome Trust will now use its endowment to fully fund the expansion of the Genome Centre at Hinxton in South Cambs. Regular readers will recall that the district council granted outline planning consent in 2021, this decision by the UK’s largest biomedical charity will now start delivery of this world class asset in the UK Innovation Corridor. The investment will triple the size of the Centre with first buildings due to be ready for occupation by early 2026.
While on the subject of the Wellcome Trust’s Sanger Centre we should mention the news last month of the latest spin-out Mosaic Therapeutics which has secured £22.5 million to develop a world-class drug discovery platform to identify genetic vulnerabilities in multiple types of cancer that can be exploited to generate new medicines for patients. The investment comes from Syncona – a leading healthcare company and Cambridge Innovation Capital, a team of investors linked to Cambridge University and very much part of the rich ecosystem which makes Cambridge so successful.
Some disappointing news comes at the other end of our Corridor. Last month we learned HS2 has delayed construction of the 7.2km tunnel between Euston and Old Oak Common stations which will now not start next year as previously planned. The reason given is that the government wishes to prioritise the HS2 section which connects Old Oak Common to Birmingham Curzon Street. The current position is that there will be a delay, not cancellation - although this could be for between two and five years. For a number of years the area to the north of Euston Station has been a major construction site and this delay will lengthen that disruption. In addition, the proposed new Euston Station is planned to provide much needed workspace for life and health sciences and tech, right where it is most needed. The HS2 decision to delay will have taken account of many factors, but there is a responsibility to limit the blight on communities within Camden – some of the most deprived in the country.
Somewhere in the middle of good and bad news comes the report from Sirius Property Finance, a consultancy, that the east of England is the UK’s most in-demand region for commercial property both to purchase and rent. Sirius suggests that this strong demand is being driven by low investment costs and high rents within the region. Nationally the average price of commercial space has fallen by 12.7% but only by 9.2% in the east of England while average rent has gone up by 19.3% in the region compared with 4.9% nationally. Overall, there is strong value in the region. Kimberley Gates, head of corporate partnerships at Sirius Property Finance, says regions such as the east of England offer the ideal balance of softening property prices and strengthening rents. “It’s no surprise that demand in these regions is substantially higher,” she says.
But, just when you might think that high demand is an unalloyed Good Thing, let us remind you of the Bidwells report in July 2022 which was pretty stark: No available laboratory floorspace in the face of 1.2m sq ft of requirements. It then went on to say, “A zero availability rate is a rare occurrence in any property market, but this is the challenge facing the 46 companies seeking laboratory floorspace in Cambridge today” (2022).
There is some evidence that the market has softened a little bit over the past six months but the general picture is still one of high demand but which has little flexibility about location. As we heard from Chris Walters of JLL at our recent board meeting, businesses wish to be in specific places in London or Cambridge (and Oxford) although Stevenage is bucking the trend to some degree. Given the lead-in time to develop new lab space, together with the way industry innovates and evolves, it is quite a challenge for investor and developer folk to provide what the market wants; and even harder for local planners to positively respond. As our own in-house sage Dr John Keddie, late of GSK, suggested: ‘the key is flexibility’ in providing workspace for research and innovation.
But a successful innovation corridor is not all railways and science parks. A belated congratulations to everyone behind the successful Levelling Up Fund bids, of which there were four along the Corridor. Waltham Forest, according to sources within the council, has had the highest number of bids approved by the DLUHC – a whopping £38 million, Harlow received a big boost (£20 million) for its arts and cultural quarter which will transform the town centre providing new performance space and artist studios as well upgrading the Playhouse theatre. A special mention also to the allocation of over £14 million to Broxbourne for the Waltham Cross Renaissance project to boost the health and well-being of one of Hertfordshire’s most deprived neighbourhoods.
The way in which we do regeneration in this country will no-doubt be part of the debate in the run-up to the next General Election. A lot of effort goes into competitive bid writing, often with the help of consultants (see UCL’s Marianna Mazzucato’s latest book ‘The Big Con’ for a critique on this if you have a spare moment). If you win it all probably feels worthwhile. But putting together a bid, even one which is not successful, is usually worth the effort because of the thinking and the relationship building that goes with it. There are many occasions when the ‘failed bid’ is the one which comes through in the longer term.
People
Last edition we said goodbye to Patsy Dell, Growth Director for Hertfordshire, we now give a warm welcome to Forogh Rahmani who will take on this key role for the county. Still in Hertfordshire, Mel Miller has left Broxbourne Borough Council to join the Herts LEP as inward investment manager – great that she stays in Herts and in the Corridor. We also say farewell and good luck to Jane Patterson-Todd, founding chief executive of Cambridge Ahead and very much the driving force behind the organisation.
And finally….one former resident of the Corridor has landed a new post which is, almost literally, out of this world. You may have picked up that Nicola J Fox, born in Hitchin and pupil at St Francis College, Letchworth was recently appointed associate director of NASA – effectively NASA’s head of science. It’s amazing the talent which comes from this Corridor!
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By John McGill, Investment and Development Correspondent
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