Cambridge: A market of contradictions

Historically, companies maintained active development pipelines to ensure laboratory teams remained focused on the next stage of growth. Without this, demand for lab space naturally decreases, prompting a shift towards office-based functions and a different talent profile. This transition is being accelerated by the continued advancement of AI-driven drug discovery tools and other technologies, which are further reducing reliance on traditional lab-based roles.

Consequently, while demand for lab talent has softened, the opposite is true for technology talent. This change is having a direct impact on occupier strategy, particularly in relation to location. Connectivity, especially access to London, is increasingly influencing decision-making. Many firms are now adopting a dual-location model, opening satellite offices near the King’s Cross Knowledge Quarter to tap into a broader talent pool, while retaining a presence in Cambridge to stay close to its research ecosystem.

This trend is supported by growing confidence in Cambridge’s infrastructure. Brookgate is set to begin further development at Cambridge North, The Crown Estate is progressing plans for the redevelopment of Cambridge Business Park, and St John’s has already commenced speculative development of the Dirac Building. Crucially, the anticipated opening of Cambridge South Station this summer is expected to be transformational, particularly for the Cambridge Biomedical Campus, which has all the necessary components to evolve into a global research centre.

An active defence

At the same time, defence has emerged as a particularly dynamic sector. The largest letting of the year so far has been Cambridge Aerospace’s 80,000 sq ft acquisition at Bourn Quarter. With several lease expiries approaching in this location, larger occupiers are increasingly reassessing their options, weighing cost efficiencies against the need to deliver high-quality workplace environments for their teams. With NATO governments increasing defence spending and ongoing geopolitical tensions reshaping priorities, demand from this sector is expected to sustain moving forward.

Supply dynamics further add to the complexity of the market. Approximately 500,000 sq ft of laboratory space was delivered in 2025, with an additional 300,000 sq ft nearing completion in the coming months. This includes neighouring Kadans’ Merlin Place and Breakthrough Properties’ Vitrum Building. While city centre occupiers tend to accept limited parking provision, those in edge-of-town and park locations still expect it, highlighting the nuanced requirements across different submarkets.

At the same time, a wave of high-quality office developments is on the horizon. Railpen is most prominent with Mill Yard (110,000 sq ft, due Q1 2027) and Botanic Place (325,000 sq ft, expected the following year). These schemes are set to advance design, sustainability and amenity provision, offering the flexible, premium workspace increasingly demanded by occupiers. Kett House, with a planned 100,000 sq ft redevelopment, has also secured planning consent at first submission, with delivery anticipated in 2029. These developments reinforce the city centre’s strength, particularly for tech, defence and professional services occupiers.

A nuanced market with clear opportunities

Despite record rents in prime locations, cost sensitivity remains a defining theme, closely tied to the ongoing challenges in securing funding. The result is a market that is far from straightforward: characterised by increasing supply, evolving sector dynamics, shifting talent strategies and stronger integration with London.

Ultimately, Cambridge is not a market that can be understood at a surface level. It is nuanced, fast-moving and, at times, contradictory. However, for those with a detailed understanding of its underlying drivers, it continues to present compelling opportunities.