Cost of AZ’s new Cambridge HQ ‘has more than doubled’
The cost of AstraZeneca’s new R&D hub and corporate headquarters in Cambridge has swelled to £750 million, more than twice the original estimate, says a report in The Times.
The cost of constructing the ‘glass doughnut’, which began in April 2015, has risen as a result of “the complexity of the build, construction cost inflation, including the impact of a weakening pound sterling, and increased investment in new technologies and equipment,” says AZ in its annual report.
The Times notes the increase in the costs means that the HQ is now one of the most expensive corporate buildings in the UK, with the cost rising substantially from an initial estimate of £330 million. The plan was also to have the site begin to be occupied in 2016.
AZ’s annual report now notes that “the complexity of the building project is reflected in the updated schedule, in which we are expected to start occupation of the building from 2020 rather than have it fully operational in that year” as reported previously.
It reiterated that the cost of the build was coming out of “operational cash flows,” something which has no doubt become a lot easier after three successive quarters of growth on the back of higher-than-expected sales of new drugs for cancer and lung diseases.
There have also been a number of reports suggesting problems with a previous building contractor, Skanska, which was replaced with Mace last August.
AZ says however that the decision resulted from the progression of the project from the base building infrastructure to the design and fit-out of labs and office areas as well as landscaping. The two companies worked side by side until November while the handover was completed.
Chief executive Pascal Soriot said earlier this year that the delays had been caused by awaiting validation for laboratories, saying that “you can’t compare it to an office building. It’s a complex building. It’s going to be the best R&D building in the world.”
Around 2,500 people from AZ and Medimmune are already working in Cambridge in a number of buildings in the area, and are becoming integrated into the city’s scientific community, said Soriot in February, whilst dismissing persistent rumours that he was planning a move to another company.
“We are now updating the overall master plan for the site and the next stage will be the development of an office building opposite our R&D centre that can accommodate an additional 1,000 people,” it says.
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