Oxford continues to see good demand for offices and laboratories, reflecting the diversity of the city’s science and tech cluster, but a lack of supply of Grade A space could send rents spiralling, says a regional property specialist.
Mike Watson, Partner at property consultancy Vail Williams, believes the city has only around a year’s office and lab spacesupply left to support demand from the life sciences and biotech sectors.
He says: “A lot of the growth in the Oxford office market has been driven by the lack of supply of Grade A office or laboratory stock, which has always been under-served here.
“Given last year’s take-up figures, which were around 420,000 sq ft of lab space, there remains approximately 12 months’ worth of supply left.”
DRIVING RENTS
Watson, who has 25 years’ commercial property experience in the city, adds: “This is driving rents up from the early £30s per square foot (psf) for traditional office space, to the mid-£60s psf – rising as high as £85 psf for lab space on some business parks.
“The lack of availability of Grade A and super prime space could push rents on even further this year.”
In 2023, Oxford University celebrated its 300th company creation, supported by its research commercialisation arm Oxford University Innovation (OUI), with 97 of its spinouts staying in or close to Oxford – the highest concentration anywhere in the UK.
Watson says: “With a healthy pipeline of university spinouts seeking more than 10,000 sq ft of office or lab space, we will continue to see a fall in vacancy rates throughout 2024.
“This lack or availability also represents an opportunity for landlords of Grade B stock to take up the slack and deliver more newly refurbished stock to market.”
