Two key statistics stand out for the office market in 2017. Firstly, total take-up reached 488,999 sq. ft. – the highest on record and a 50% increase on the 2016 level. Secondly, VSL recorded that 70% or 342,000 sq. ft. of all office take up was to the technology sector.
The report states there are a combination of factors driving demand from the technology sector in Oxfordshire. There is a clear environment for entrepreneurship and innovation emanating from the Universities, closely backed by newly available finance from Oxford Sciences Innovation plc and the emergence of new flexible start up space throughout the county. A number of these companies are now emerging to dominate at the larger end of the market such as Immunocore and Apdaptimmune at Milton Park and Oxford Biomedica and Oxford Nanopore Technology in Oxford.
VSL recorded a total of 53 office transactions in 2017 with 31 or 58% accounted for by the technology sector. Likewise, the technology sector continues to drive demand in the industrial market, now totaling some 28% take-up which is similar to 2016 but up from just 5% in 2015.
The industrial market saw the best year for take-up since 2003 with total take-up reaching around 1.1 million sq.ft and supply levels stable at 1,033,000 sq. ft.
Richard Venables, director at VSL & Partners says: “Rents in both the office and industrial market have continued to increase. Prime office rents in Oxford city centre have now reached £30.00 per sq. ft. which will give further encouragement to developers to consider speculative development throughout the market.’
Co-director Tom Barton added, “Industrial buildings that are suitable for the technology markets have seen the focus on rental growth and rents at Oxford Industrial Park have now reached £12.00 per sq. ft. following a letting to Oxford Photovoltaics. It is likely that these properties will continue to be the focus of rental growth during 2018.”
“Oxford is the focus of considerable attention from Whitehall and the announcement in the Autumn Budget Statement of £215 million of funding towards its infrastructure will further improve the prospects for this area. We are confident of the continued expansion of the technology sector and its positive impact on the commercial property market.”
The VSL annual report provides an analysis of the office and industrial market focusing on central Oxford and the A34 ‘Innovation Knowledge Corridor’ for offices from 3,000 sq ft and above and industrial from 5,000 sq ft and above.
2017 marked VSL’s 15th anniversary when the firm was ranked as the most active agent and dealmaker of the year by leading property publication Estates Gazette Interactive (EGi) for the eighth year running. In 2017 VSL transacted 19 office deals and 20 industrial deals equating to a 40% market share for both sectors.
For further information or to speak to one of the VSL experts, please call 01865 848488 or visit www.vslandp.com.