With nearly £10 billion of life science-related capital raised by Cambridge-headquartered companies, the city was the highest in the UK
Corporate investment in Cambridge in 2021
In total, corporate investment raised by companies headquartered in the Cambridge area totalled around £12.6 billion during 2021, of which over 77% was related to life sciences. Companies in this sector include ‘pharmaceuticals’ and ‘drug discovery’, a category that BenevolentAI, who did a couple of corporate deals last year, sits within. Two large M&A deals were Kymab and GW Pharmaceuticals.
Early- and later-stage fundraising, for start-up and scale-up life science companies, often involves venture capital (VC) funding. Capturing and assessing the opportunities of this type is important to track the growth and formation of future companies. In total, in 2021, around £1.5 billion of VC was recorded for Cambridge-headquartered companies. It is also good to see significant later-stage VC occurring in the city with CMR Surgical raising over £430m. Other key deals include Artios, Centessa Pharmaceuticals and bit.bio, the latter of which completed a third-round VC fundraise in early-2020, before taking around 37,000 sq ft of laboratory space, at Babraham Research Campus, in the first half of the same year. Only as recent as 2017, was bit.bio at the grant and seed funding stage.
One of the biggest challenges for the city in the short term is the supply of laboratory space to accommodate those companies successfully fundraising and hiring
Steven Lang, Director, Commercial Research
The chart below shows the 2021 VC raised for the life science sector but by global city. For Cambridge, sitting in the global ‘top ten’ is significant for the reputation of the city and the UK. It underlines the city’s global recognition as a centre of life science and technology research and development. This will support the real estate markets in the future.
The map shows distinct clustering of capital raises in 2021. Note that the deal symbols in some locations have been spread out to show the quantum rather having the deals sitting on top of each other.
Office market summary
Despite being a city with a population of only around 120,000, the level of take-up in 2021, at just under 700,000 sq ft, is on par with a key UK regional city. The total level of take-up was 53% higher in 2021, compared to 445,000 sq ft total in 2020. The level of take-up was assisted by the Cambridge market seeing one of the largest deals signed on Cambridge Science Park in the last ten years. The US-based streaming company Roku, which is NASDAQ-quoted, took over 116,000 sq ft at Cambridge Science Park.
Whilst the office availability ratio sits around 10%, the laboratory availability ratio is barely above zero. There are significant plans, from schemes across the city, to deliver more laboratory space, but there will be a time lag in getting this to the market. Rents in Cambridge are expected to rise throughout the forecast period and will remain some of the highest outside of London. The presence of science and technology companies, coupled with a relatively limited supply of office and laboratory stock, will ensure rents continue to rise.