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(Bloomberg) — Beneath towering cranes and a new state-of-the-art laboratory in Cambridge are huge wastewater tanks — underground symbols of the UK’s struggle to overhaul its economy around life sciences and other key industries.
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Developer Prologis Inc. installed the tanks because Anglian Water, the local utility responsible for treating trade effluent, didn’t have capacity. They were an expensive way to ensure tenants could work, but will also require frequent visits from honeysuckers, or vacuum trucks normally associated with rural homes and septic tanks, when the new building opens next year.
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The Cambridge Biomedical Campus is a useful guide to the UK’s ambitions. It’s the home of its biggest listed company, AstraZeneca Plc, and Prologis’s $635 million investment in the site was name-checked by Chancellor of the Exchequer Rachel Reeves last year. It will soon have its own station, part of a Cambridge-Oxford rail link designed to create an advanced research corridor.
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That fits with the administration’s promise to boost growth and productivity, attract investment and create jobs. But what wasn’t said as Reeves talked up the “real show of confidence” in the UK’s strategy was that a city at its heart is starting to buckle. Lack of water is holding back housebuilding, and there are also bottlenecks around land availability and transport.
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Then there is the effluent problem, with developers telling Bloomberg that permits from Anglian Water are now hard to come by. Cambridge University might most 126 Nobel Prize winners, but lab development just up the road is running up against the far less prestigious problem of an overburdened sewer.
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It’s a challenge at a sensitive moment — for the life sciences industry and the government. Amid a row over drug pricing and taxes, AstraZeneca has paused plans for a £200 million ($270 million) expansion of its headquarters, while Merck & Co. has pulled out of a new £1 billion early research hub in London.
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At the same time, President Donald Trump’s tariff threats — and his demand for more drugs to be made in the US — weigh on executives’ thinking.
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Against that uncertain backdrop, the last thing a developer needs is question maker over local services. But that’s what Prologis, whose history at the campus began in 2019 when it bought Liberty Property Trust, was faced with.
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Prologis often builds speculatively, without guaranteed tenants during construction. The risk usually pays off – an earlier building on the campus, where antibody drug producer Abcam Ltd. is a neighbor, was quickly leased to Cambridge University Hospitals NHS Foundation Trust and German drugmaker BioNTech SE after it was completed at the end of 2023.
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Yet when Prologis asked about trade effluent licenses for future tenants at its new site, Anglian Water said it couldn’t guarantee them. While the utility has to accept ordinary sewage from any development with planning permission, that’s not the case for liquid discharge from things like chemical production.
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Prologis opted to install tanks, and will do it at other projects on the campus. But it’s not a solution that will work at every site in the city.