The latest Bidwells research suggests that Oxfordshire’s industrial market is thriving despite the challenging commercial climate. The first six months of 2017 saw take up rise, requirements increase and rents hit a record high, as occupiers showed faith in a buoyant local economy.
The Bidwells figures indicate that take up in Oxfordshire’s industrial market is at its highest level since 2013, with 221,000 sq ft of space transacted during H1 2017. Activity was strong right across the sector, with the largest deal being the 30,080 sq ft letting to Alere Toxicology at Abingdon Business Park.
Business sentiment for industrial occupiers across the county appears to remain positive, with the level of requirements increasing to 2.1msq ft.
Strong occupier appetite has seen supply continue to tighten, with Bidwells recording a 72.9% reduction in stock since 2014.Overall availability is down to 381,700 sq ft, of which there is just 154,000 sq ft of grade A product. This includes the largest unit of 90,400 sq ft at Milton Park.
Those developers willing to deliver new prime product are likely to reap the benefits. The development pipeline includes a new speculative scheme at the db symmetry site in Bicester where db symmetry has started construction of a 110,000 sq ft speculative unit. The move follows the presale of an 88,000 sq ft unit to Bentley Designs. The supply chain and logistics hub has outline consent for an additional 477,000 sq ft, with the remaining units available on a pre let basis.
David Williams, Partner in Bidwells’ Oxford office said: “Rising demand and tightening supply continues to put pressure on rents. Prime rents have hit a record high of £10.75 per sq ft, representing an increase of 30.3% since 2014. Rents for good secondary stock have also risen to £8.75, with the county recording an annualised rental growth rate of 2%.”
All indicators suggest that the second half of the year will see the sector continue to prosper. Oxford boasts the third fastest growing economy in the UK, driven by the strength of innovation and knowledge based sectors. Its economy grew by 2.5% in Q1 2017, compared to a UK growth rate of 2% and it has an estimated GVA of £8.2bn.
The county’s credentials continue to attract inward investment. Despite concerns over Brexit, BMW for instance has pledged to build the fully electronic version of the Mini at Cowley, with production due to commence in 2019.
The county’s growth prospects are so strong that Oxford Growth Board has identified £9bn of infrastructure requirements. Major projects include improvements to the A34 and A40, redevelopment of Oxford station, the development of rapid bus routes to key locations and investment in the ‘Varsity rail route. Improvements to Oxfordshire’s infrastructure can only provide a further boost to its industrial property market.
