Asked to referee a paper on a topic that I think another group is working on I have been asked to serve as the (only) referee on a paper that is in my field, but is not within my specific area of expertise. As far as I can recall, this paper seems to be on a topic that is also being independently worked on by a large collaboration of established researchers in the field. The work I am reviewing seems to be OK, though not especially good. I am under the impression, though I am not sure, that the large collaboration is working on a much more detailed and thorough version of the same work, but they have not published it yet. Should this affect my review in any way?
No. Jugde the paper based on the currently publicly available knowledge. The authors are not to blame for future knowledge.