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31st December 2017
One of the regions likely to attract growing interest from developers in 2018 is the Cambridge- Milton Keynes- Oxford corridor. The government has made much of the potential for the area linking the two university cities to become a ‘globally significant economy’ and the Budget included plans to invest £135 million next year to boost infrastructure, housing and business investment in the area.
The science parks around Oxford and Cambridge have attracted thriving clusters of science and tech-based businesses which are continuing to expand whilst other promising sectors such as motorsports have long favoured the area. The government has recognised a need to build up to one million new homes in the area by 2050 starting with a housing deal with Oxfordshire for 100,000 homes by 2031. It also is working on Central and Eastern sections on commitments for 2018.
Meanwhile, developers are responding to the potential in the corridor. Urban & Civic, which has a major portfolio of housing plots in the area, has submitted plans for 9,300 new homes in Cambs which are set to be determined in the first half of 2018. It expects completions on its sites to double to 720 in the next financial year to September 2019.
Connections across the corridor are set to improve dramatically with the re-opening of the East West Rail ‘varsity line’ which aims to complete the central section between Cambridge and Bedford by the mid-2020s and leverage in new private investment. The government is also spending £5 million on plans for a new Cambridge South Station and is looking at future rail growth across Cambs. In Oxfordshire, plans for new rail services and stations – including one at Cowley – are being explored.
On roads, construction will start on key parts of an expressway between Cambridge and Oxford in the second Roads Investment Strategy, with the aim that it will be ready to open by 2030. According to National Infrastructure Commission estimates, on current trends the corridor could see jobs growth of 335,000 to 2050, increasing output by £85 billion and, moreover, that it has the potential to support a further 700,000 jobs, increasing output by £173 billion.
Even before the latest initiatives, development prospects across the area looked healthy. In a recent report, property consultants Bidwells said demand for office space in Cambridge/Oxford/Milton Keynes stands at 2.6m sq ft, compared to current supply of 2m sq ft and with Grade A space accounting for only a quarter.
Strong demand for office/lab space has continued to push up rents in the area between London, Oxford and Cambridge - described as the ‘golden triangle’ - which also bodes well for future development. Rents for prime quality office space in Oxford have risen by 13.2% to £30 per sq ft, over the past 12 months whilst in Cambridge rents are up by 4.1% to £38 per sq ft. In Milton Keynes, healthy demand for second hand office space has seen rents rise by more than 33 per cent.
Milton Keynes is also set to benefit from new infrastructure investment. Glenigan data shows tenders have recently been returned for a new £29.5 million overbridge as part of the A421 dualling with work set to start in summer 2018.
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