Knowledge-based businesses have helped fuel demand for offices in Oxfordshire, with the office market enjoying record breaking rents, according to property consultants Bidwells.
According to the firm’s latest research, the Oxfordshire office market has continued to prosper in the face of economic uncertainty. Although overall supply remains relatively stable at 544,500 sq ft, grade A supply dropped 48% in the first half of 2017. Occupier demand for prime product has eaten into stock levels and left just 81,700 sq ft of grade A space on the market.
During the first six months of the year, the level of business space requirements rose by 74% and half-year take-up hit a record high of 225,000 sq ft.
A significant 72.6% of take-up was by knowledge-based businesses from a range of different sectors. The largest recorded transaction was Oxford Nanopore’s purchase of 55,700 sq ft Danby House at Oxford Science Park.
The supply-and-demand dynamic has led to considerable rental growth, with Bidwells recording an annualised growth rate of 2.8%. Prime rents hit a record £30 per sq ft during Q1 2017, while secondary rents have risen by 9.5% over the past 12 months, achieving a new high of £23 per sq ft.
The strength in depth of the Oxfordshire economy is likely to lead to further growth in the coming months, fuelling take up and putting further pressure on rents. The area continues to exploit its global reputation as a centre for innovation and magnet for high end occupiers.
According to the latest Tech City UK report, Digital Tech output in Oxford has grew by 43% between 2011 and 2015, helping the city secure its place as the fifth largest Digital Tech economy in the UK.
As well as attracting inward investors, the area is also successful in growing its own future occupier base. Oxford University Innovation (OUI), the university’s research commercialisation company launched 24 companies in 2016, attracting a combined total of £52.5m early stage funding.