30 January 2013, A two-tier market has become increasingly evident within Oxfordshire’s commercial property market according to Carter Jonas’ Commercial Edge Oxfordshire research report covering the office and industrial markets in Oxford city centre, Abingdon, Witney, Harwell, Didcot, Bicester and Banbury.
Enquiry levels by businesses looking for new or alternative office space have remained broadly buoyant within Oxford’s City centre in contrast to the out of town locations where greater availability is enabling occupiers to strike strong deals.
- Headline office rents have remained unchanged in 2012 at £23.00 per sq ft
- Scope for office rental growth will be seen for Oxford City Centre new builds which are forecast to reach £25.00 per sq ft
Footloose occupiers have become increasingly expectant of substantial incentive packages, particularly away from Oxford’s City centre and depending on the quality of location and quantum of available stock in individual markets
Oxford accounted for 59% of all Oxfordshire office letting activity in 2012, compared to 53% in 2011
Office take-up totalled 144,000 sq ft, 48% of the 2011 annual total (301,440 per sq ft) which was significantly boosted by the 80,000 sq ft Centrica pre-let at Oxford Business Park
Office availability stands at 921,000 sq ft, a 16.4% increase from 2011
Supply continues to be dominated by Grade B accommodation which accounts for 96.7% of total availability
- There is an acute lack of available Grade A accommodation evident across the county with Fletcher House on Oxford Science Park totalling 14,966 sq ft the only Grade A accommodation currently available within the market
Abingdon and Witney proved relatively buoyant with Abingdon seeing lettings totalling 37,891 sq ft, comprising five transactions, accounting for 26% of total take-up across the county. Four of the five transactions were located on Milton Park, the largest of which was the acquisition of 3 Park Square by Taylor and Francis of 11,873 sq ft. Witney witnessed good levels of churn from local occupiers, with take-up totalling 15,700 sq ft in 2012
Jon Silversides, senior associate, commercial team in Carter Jonas’ Oxford office said: “Despite continuing uncertain economic times, Oxfordshire is well placed to both weather the storm and grow due to its diverse economy and specialist areas; which range from motorsport, biotechnology, engineering, through to the UK space agency at Harwell."
“Rental and incentive levels are likely to remain static across the county for existing stock in 2013. However, with no Grade A stock in the industrial sectors and only one unit in the office sector, developers would be in a stronger position to dictate terms for design and build solutions."
“Over the longer term, subject to the availability of sites, we anticipate that any new development in Oxford City Centre will be able to command premium rentals due to scarcity of supply."
“In 2013, Oxfordshire will continue to retain and attract a diverse range of businesses as it capitalises on its position as a centre for innovation, which will benefit not only the county, but businesses and their workforces."