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 space supply left to support demand from the life sciences and biotech sectors.
He said: “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.”
Mike, who has 25 years’ commercial property experience in the city, added “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.”
Mike, who works out of Vail Williams’ new Oxford office, added that last year life sciences accounted for around two thirds of overall office and lab take-up in the city.
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.
Mike added: “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.”
He said that although availability to meet client needs was sparse in central Oxford, despite the newly completed 65,000 sq ft Inventa laboratory and office building, there was better supply situated on out of town business parks.
These include Begbroke Science Park, Harwell Science & Innovation Campus, Howbery Business Park, Milton Park, ARC Oxford (formerly Oxford Business Park), Oxford North (for completion), Oxford Science Park and Oxford Technology Park.
“It is an exciting time for the Oxford property market, and we are looking ahead to the rest of the year with a sense of excitement and anticipation – both with office and laboratory market in mind as well as the retail property market, for which we are cautiously optimistic.
