Cambridge, England--Andrew Gordon, Director of Lambert Smith Hampton’s (LSH’s) Cambridge Office, believes it’s not just the biotech companies that need flexibility when it comes to office accommodation.
Andrew thinks more business incubators are needed for start-up and fledgling companies rather than traditional office space. He warns that Cambridge will have to diversify in the future, and reduce its reliance on the R&D and professional services sectors.
Andrew said that the digital and media sectors are far more relevant, and they are going to require a different focus in terms of property. He feels that the market needs to develop its technology centres so that business can function successfully in the 21st Century.
Difficulties arise when smaller traditional office units are occupied by companies that experience rapid growth. It is these fast-growing companies that need flexibility rather than to be restricted by traditional lease structures. A solution needs to be found to enable such businesses to develop and change quickly.
Andrew said: “Old fashioned lease structures, where tenants take on a lease for a lengthy period of time, have disappeared for good. It is now important to look at new flexible lease structures. However, this will present difficulties for developers and investors resulting from a lack of certainty of income.
“From my experience, most occupiers will pay more for flexibility and operational efficiency which will result in higher rents per square foot. It is a question of changing the mindset of landlords.”
Andrew sees diversity as the key to future economic growth, and believes there is now a pressing need for a new type of building to meet demand.
The next stage is to consider how to invest in property offering flexible terms, as many companies don’t wish to occupy traditional buildings. Fast growing companies need buildings that will evolve with product development, and following ongoing investment present a better whole life cost.
Andrew goes on to say: “Developers have provided bespoke buildings in the past, but in these turbulent times investment and funding markets are going to have to get their heads around the implications before they appreciate the opportunities. That said, I don’t believe speculative building will return for at least 12 months. We will need to demonstrate that occupier demand has returned before that happens!
“The banks haven’t been doing any major lending in the commercial property sector recently, and, going forward, they will be looking for developers to take more risk and put more money into projects. A traditional approach, but one that is unlikely to facilitate the changing face of commercial property.”
Andrew Gordon
Director
Lambert Smith Hampton
Cambridge Office
Tel: 01223 276336
Email: agordon@lsh.co.uk
Lambert Smith Hampton (LSH)
LSH is a leading commercial property consultancy with an unrivalled national network focused on the UK and Ireland property markets. Its expert teams deliver a full spectrum of transactional and consultancy services and business-driven solutions for clients. LSH is the ‘UK’s most active national agent’ and ‘Top National Office and Industrial Agent’ (Estates Gazette’s ‘EGi Deals Competition’)
Lambert Smith Hampton’s (LSH) Cambridge office is a commercial property consultancy providing property services and advice in Cambridge, the surrounding area and nationally. With LSH clients have the added advantage of each office being backed by the strength of a national office network. For clients, this means 10 key divisions and over 850 professional staff working together to address the commercial property difficulties you may face, anywhere in the UK.
Lambert Smith Hampton is a founder member of the Elite Cambridge Business Circle.
6 Wellbrook Court
Girton Road
Cambridge
CB3 0NA
UK
Tel: + 44 (0) 122 327 6336
Fax: + 44 (0) 122 327 6226
http://www.lsh.co.uk
For more information contact:
Andrew McGahey
Director, Head of Cambridge Office
Lambert Smith Hampton
Tel: 01223 276336
Email: amcgahey@lsh.co.uk
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