Welcome to the latest Commercial Edge update, our quarterly report on the outlook for the office and industrial markets across the key regional cities in which we operate.
33 offices across the UK, including 9 in central London
National
Head of Research
Daniel Francis
020 7518 3301 | EMAIL >
Associate Research Analyst
Rad Radev
020 7518 3270 | EMAIL >
Head of Commercial
Scott Harkness
020 7518 3236 | EMAIL >
Research
Partner, Leeds
Chris Hartnell
0113 203 1079 | EMAIL >
Leeds
Bath
Partner, Bath
Philip Marshall
01225 747261 | EMAIL >
Bristol
Partner, Bristol
Andrew Hardwick
0117 363 5694 | EMAIL >
Oxfordshire
Partner, Oxford
Jon Silversides
01865 404458 | EMAIL >
Cambridge
Partner, Cambridge
Will Rooke
01223 326815 | EMAIL >
Birmingham
Partner, Birmingham
Alex Tross
0121 306 0401 | EMAIL >
National Overview
Birmingham / Midlands
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Total office take-up across the Commercial Edge cities amounted to 979,900 sq ft in Q4 2023, 27% up quarter on quarter and 6% above the five-year quarterly average.
Encouragingly, data suggests that office occupancy rates have stabilised over the last year, and overall occupier demand across the Commercial Edge cities appears to have levelled off, with take-up in 2023 of just over 3.5 million sq ft, almost identical to the previous year. However, demand levels remain some way below the average of 4.5 million sq ft per annum recorded over the five years prior to the pandemic. Oxford and Cambridge outperformed in 2023 compared with 2022, with both cities seeing an increase in take-up of more than 40%, driven by strong demand from firms in the life sciences sector. Strong demand for the very best space continues to put upward pressure on rents, with prime rents growing by nearly 6% year on year on average across the Commercial Edge cities. Recent development schemes have set new benchmarks in Bristol, Birmingham, and Leeds, with prime rents now at £44 psf, £41 psf, and £38 psf respectively. Meanwhile, markets like Oxfordshire have seen strong annual rental growth due to limited prime stock and high demand, especially from life sciences occupiers. Moving forward, we anticipate that prime buildings will outperform secondary ones by an increasing margin as companies zero in on top-tier space to attract staff, serve clients, and meet rising environmental standards, which should support further rental growth in that segment. The increase in hybrid working, which typically demands less space, paired with the stricter Minimum Energy Efficiency Standards (MEES) regulations introduced in April 2023, will expedite the retirement of older properties. The proposed further tightening of MEES regulations from 2027 will only amplify this shift. We expect many older unfit properties to be repurposed or redeveloped in areas where the cost of refurbishing the building to grade A standard is not justified by its rental return.
Industrial take-up across the Commercial Edge cities dropped notably in Q4 2023 compared with the third quarter. At 1.65 million sq ft, take-up in Q4 was 35% down quarter on quarter, down 43% compared with Q4 2022, and 48% below the five-year quarterly average. Despite the fall in the last quarter, annual take-up in 2023 totalled 13.8 million sq ft, which was broadly in line with the year before. The UK logistics sector enters 2024 with a mix of cautious optimism and lingering concerns. Consumer confidence remains subdued, highlighting uncertainty and reduced spending, while household expenditure has nearly flattened. Although online retail has plateaued compared to the previous year, this doesn't paint the full picture. Global e-commerce continues to boom, suggesting long-term potential for UK warehouses. Logistics occupiers will likely adopt a cautious approach in 2024. The "space grab" witnessed in 2020-2022, largely driven by pandemic-specific needs and longer-term shifts in some sectors like e-commerce, has given way to more measured expansion decisions. Some major occupiers in retail and fast-moving consumer goods, for instance, might reassess their space requirements due to evolving consumer buying patterns. We expect demand to remain steady in 2024, driven by a diverse range of occupiers. Emerging sectors like electric vehicle manufacturing and life sciences could fuel demand for specialised facilities. Additionally, with companies shifting production closer to their customer base, nearshoring trends could present opportunities for UK logistics. Automation and sustainability will likely be key differentiators, attracting occupiers seeking cost-effective and environmentally friendly operations.
Data source: Carter Jonas
"Markets like Oxfordshire have seen strong annual rental growth due to limited prime stock and high demand, especially from life sciences occupiers."
Nick Waddington
0121 824 0771 | EMAIL >
34 offices across the UK, including 9 in central London
"Despite the fall in the last quarter, annual take-up in 2023 totalled 13.8 million sq ft, which was broadly in line with the year before."
7%
13%
7.5%
Vacancy rate
Availability rate
Prime yields
Take up in the Bath market totalled 58,951 sq ft in 2023, 20% below the five-year average and the lowest year for office leasing since 2010. When deals across the wider Bath & North East Somerset region are stripped out, there was only just over 40,000 sq ft of space let in central Bath – and many of the lettings were very small. The serviced office market continues to shine within the city, and with current lettings agreed, this area appears to be moving well and will likely result in better take-up figures for 2024. For a city dominated by small businesses, it is only surprising that it took a pandemic for this area to take off. The 6,885 sq ft leased by Vio Offices Bath at 9-10 Bath Street in early 2023 was the largest deal by this type of occupier last year. Bath now has a variety of space from budget level letting at high-teens per square foot up to new grade A space at mid-£30 per sq ft, which appears to be a step too far for local businesses. It also proves there is no demand to move to Bath from surrounding locations with the inherent transport challenges. Availability within Bath hovered around 340,000 sq ft for most of the year, which is 13% of the total stock. This compares poorly compared with historical figures across the city – previously circa 120,000 sq ft. For many decades, many Bath office occupiers rented beautiful Georgian buildings – typically over five floors and without lifts in these listed buildings. Those days are long gone, and as leases expire, almost all occupiers move to open-plan space, of which Bath has a relatively limited supply. Much of the older stock is being converted back to its originally intended use as residential, although thus will only have a modest impact on the city’s housing stock. The key issue for occupiers is that Bath housing prices – rental and purchase – are well above affordable levels for the city’s comparatively low-earning jobs, the majority of which are within the retail and service sectors.
Data sources: Carter Jonas, CoStar
1 Western Ter 6 Monmouth Pl
Property
Studio Walcot Standout Beauty
Tenant
1,024 1,000
Area (sq ft)
CC CC
CC/OOT
£36 psf
Q-o-Q
Prime office rent Q4
5,124 sq ft
-74%
5-Y average
-72%
Office take up Q4
"The key issue for occupiers is that Bath housing prices – rental and purchase – are well above affordable levels for the city’s comparatively low-earning jobs."
£41 psf
240,274 sq ft
City centre
Out of town
£26 psf
41,417 sq ft
One Centenary Way Norfolk House 9 Colmore Row 103 Colmore Row Birmingham Business Park
Milles & Reeve Global Banking School CPS No5 Barristers Chambers Holman
32,088 29,383 27,589 18,816 16,000
CC CC CC CC OOT
1 Newhall Street Veterinary Hospital The Southside Building
Ardstone Capital St Modwen Paloma Capital
Seller
NFU Mutual The Charities Property Fund Birmingham Hippodrome Theatre Trust
Buyer
£15.35 million £8.5 million £8.3 million
Price
Data sources: Carter Jonas, CoStar, RCA
£10.00+ psf
Prime industrial rent Q4
4 million sq ft
Industrial take up Q4
MPS9 Magna Park Gravelly Point EMDC 280 Longbridge 155 Parallel 113
CEF UO Alliance Healthcare Mediq Tesla Hydrorock
388,444 285,692 279,418 155,000 113,641
Lutterworth Birmingham Derby Birmingham Darlaston
Submarket
Data sources: Carter Jonas, CoStar, EG Radius, RCA
Type
Office Retail Office
Yield
8.50% TBC 9%
£140 million £42.6 million £10 million
8.7%
9.9%
6%
6.5%
Midlands
5.25%
82%
43%
1%
-51%
-15%
-42%
2,500
Millions
2,000
1,000
1,500
500
0
-23%
-44%
In 2023, Birmingham’s office city centre take-up totalled 703,000 sq ft, broadly in line with the previous year’s figures. Despite the prevailing shift in preferences among occupiers towards high-quality office spaces and the impact of hybrid working models on demand, this figure still modestly exceeded the five-year annual average of 680,000 sq ft. Some of the largest deals last year were by occupiers from the financial sector, such as Lloyds agreeing for 59,896 sq ft at 6 Brindleyplace in Q3 on an 18-month term, while it refurbishes its existing Birmingham office at 125 Colmore Row. Demand from law companies has also been strong throughout 2023. Law firm Mills & Reeve took 32,088 sq ft at One Centenary Way, while No5 Barristers Chambers took 18,816 sq ft at the newly-build and almost fully let 103 Colmore Row, both deals were in the last quarter of the year. Educational occupiers have been very acquisitive recently. Global Banking School (GBS) agreed to 29,383 sq ft at Norfolk House in Q4, the distance learning school Arden University took 22,924 sq ft at 156 Great Charles Street, while Aston University leased 27,006 sq ft at The Citadel, both in the first half of the year. Buildings that meet occupier ESG (Environmental, Social, and Governance) requirements are not only in great demand but are also commanding substantial rents, as evidenced by the £41 per sq ft paid by Mills & Reeve at One Centenary Way. The trend has been towards the best-in-class offices, leading to a scarcity in this segment that may drive further rental growth. Although the pipeline has halved compared to the five years before the COVID outbreak, several new schemes are underway. The largest one is Three Chamberlain Square, bringing 185,000 sq ft of BREEAM Outstanding space, expected to be completed in 2025. Several large buildings are also under renovation, such as 19 Cornwall Street (134,443 sq ft), which will deliver a BREEAM Excellent rating once finished by the end of 2024. Looking ahead to 2024, this trend is expected to persist. Occupiers continue to seek top-tier offices to support recruitment, retention, and employee engagement. They are willing to pay a premium for such spaces. Still, the challenge lies in the availability of high-quality offices, which now stands at around 4% sq ft in the city centre, considering the recent take-up trends. For developers, this presents a unique opportunity. If there is a willing seller, the situation could be financially advantageous. Investing in upgrading properties is less risky now, as the market recognises and accepts the premium for the best spaces.
While take-up levels have softened compared to the past two years, the Midlands industrial market sentiment remains positive despite facing challenging macroeconomic conditions. Take up in 2023 totalled just above 20 million sq ft, which was 32% down year on year. Although interest rates and inflation are relatively high, companies from the logistics and e-commerce sectors are still actively leasing units in the Midlands. Companies including Maersk, Sainsbury’s, and Inditex have each taken more than 600,000 sq ft of new industrial space in the market in the last year. Vacancy rates are inching upwards, currently hovering around 6.5%. However, the scarcity of modern or newly constructed units — a situation made worse by a reduction in speculative construction starts due to elevated construction and debt costs — is maintaining upward pressure on rents, and we expect core locations to see further rental growth in 2024. Demand remains strong for both new speculative and refurbished modern units. This is highlighted by notable transactions, such as Alliance Healthcare leasing Abrdn’s 285,692 sq ft speculative unit at Gravelly Industrial Estate in Birmingham, and Tesla acquiring St Modwen’s 155,000 sq ft speculative unit at Longbridge, both deals completed in the last quarter of 2023. Additionally, Amazon's recent significant commitment to a circa 2 million sq ft new distribution hub at Segro’s Northampton Gateway signifies a noteworthy return to the market.
"Investing in upgrading properties is less risky now, as the market recognises and accepts the premium for the best spaces."
"Although interest rates and inflation are relatively high, companies from the logistics and e-commerce sectors are still actively leasing units in the Midlands."
8.5%
Data sources: Carter Jonas, Experian, Bristol Office Agents Society, RCA, CoStar, EG Radius
10.3%
£44.00 psf
£28.50 psf
77,253 sq ft
City Centre The city centre market is polarised between the best new grade A product, which is still experiencing growth in headline rents and steady demand, and the grade B band, which is markedly more difficult. As a result of weaker demand in the secondary segment and shortage of high-quality offices, the overall take up in the city centre dropped to its lowest level in more than a decade, totalling 419,000 sq ft, 30% below the 10-year average. Competition for the very best assets pushed the prime headline rent to £44.00 per sq ft, and we expect this level to move upwards to £46.00 per sq ft and beyond during 2024. In addition to growing rents, incentives remain low, and these trends are expected to continue as occupiers seek and are prepared to pay for high-quality space. The effects of the increase in agile working, driven by the combined effects of COVID and the strong employment market are still unfolding, but the evidence suggests that major employers are reducing the amount of space to a level where, in many cases, they cannot accommodate peak time usage. This leaves home working and managed flexible workspaces to soak up the overflow. Not surprisingly, the serviced office operators are doing well with high occupancy rates. Landlords of grade B properties are confronted with challenging decisions: they can opt to refurbish and upgrade their properties to achieve zero carbon credentials, or they can pursue alternative strategies. These alternatives include leasing to serviced office operators or converting the properties into student housing or residential units. Going forward, we expect a greater proportion of the supply pipeline to be refurbished rather than newly built, given that the city centre has around 1 million sq ft of available grade B office space. Dyson’s letting of 66,315 sq ft at 1 Georges Square in the last quarter of 2023 is a good example of adding value to an existing site. The deal is part of the engineering firm’s £100 million drive to create a new research and development hub in the city. The Department for Levelling Up, Housing and Communities prelet of 28,550 sq ft at L&G’s refurbished Neighbourhood North, is another example to note. The market reaction to CEG’s Crescent (101,000 sq ft) will be an interesting insight into the ability of large, regenerated buildings to compete with brand-new schemes such as Assembly and EQ. In the case of Crescent, besides its excellent zero-carbon credentials, it has a fabulous setting and an unrivalled range of unit sizes. Grey space and fitted options are proving to be of greater interest to occupiers than hitherto. Fitted space will comprise a larger segment of the market going forward.
1 George's Square Neighbourhood North Lakeview The Picture House Bridgewater House
Dyson DLUP Hewlett Packard Ecosurety Outlook Energy Services
66,317 28,550 26,746 10,727 8,678
CC CC OOT CC CC
Temple Quay House Picture House
abrdn Grainmarket Properties
Confidential Ecosurety
Office Office
£9.00 psf
366,427 sq ft
2023 saw the heat come out of the industrial market, with take-up down significantly to 1.5 million sq ft, 36% down year on year and 26% below the five-year average. The fall in demand was centred around a lack of large requirements with only three deals above 50,000 sq ft recorded for the whole year. Industrial investment volumes were also down in 2023. However, this was not due to a lack of demand. There are vast amounts of investors with cash resources ready to deploy across the industrial market. A differing opinion on pricing between vendors and purchasers has caused a reduction in transactions. The smaller end of the market, sub-50,000 sq ft, remained resilient, with good levels of occupier demand. 2023 saw minimal development of buildings below 50,000 sq ft, meaning void periods in this size band remain low. Demand for open storage remained strong throughout 2023, with no significant new open storage sites coming to the market. The increase in build costs over the last 24 months for industrial properties means that, in some cases, developers and investors are getting a better return on their investment by clearing industrial sites, and not developing new industrial schemes or refurbishing existing stock, but renting the cleared sites as open storage. With open storage rents nearly doubling over the last three years and without any anticipated let-up in demand, we expect rents to continue to perform well through 2024 and beyond. Industrial rents, remained robust, with a current prime headline rent of £9.50 per sq ft, an increase from £9 per sq ft a quarter ago. With rents continuing to grow, it will not be a surprise that we witnessed incentives increase. ESG will continue to be a driver for demand. Over the last year, we have seen an increasing number of companies looking to realign their property portfolio with their businesses’ ESG aims. We anticipate this realignment of portfolios to lead tenants to activate their lease events, moving away from older secondary stock into modern buildings which support their company's ESG ambitions. Naturally, modernising property portfolios will drive occupational costs upwards, which is fundamental to helping the open storage market. We expect increased demand from foreign investors, particularly from American investors, who are looking to deploy capital into the UK market. We expect the investment market to pick up as the difference in pricing aspirations between vendors and purchasers reduces, supported by an anticipated cut in interest rates. We expect increased demand from foreign investors, and a particular expectation of American investors looking to deploy capital into the UK market.
Access 18 St Andrews Industrial Estate Parallel 49 Winderstoke Trading Estate Princess Street
Avonmouth Avonmouth Avonmouth Weston-super-Mare Bedminster
Area
50,473 23,276 17,000 12,225 10,746
New Lease New Lease New Lease New Lease New Lease
Data sources: Carter Jonas, IAS, CoStar, EG Radius, RCA
Offices
5.3%
6.2%
5%
Industrial
1,200
800
400
200
17%
-43%
130%
70%
116,903 sq ft
£49.5 Million £7.75 million
6% 8.1%
£9.50 psf
-14%
-30%
600
*The investment volumes include office, industrial and retail
"There is healthy pent-up demand which should see improved take-up in Q4 2023 and in 2024."
Out of Town Decentralised offices remain an overlooked asset class nationally, but the take-up statistics for 2023 indicate that the Bristol out-of-town market is in line with the 10-year trend, with 276,867 sq ft let in total last year. While this is reassuring, the numbers are underpinned by two non-typical transactions in the sales of 2630 Aztec West to Rheinmetal and Motion Media Technology Centre to Chimpanzees. Aerospace and defence are the key sectors that underpin the out-of-town market, although educational and medical users are likely to account for growing proportions of this market going forward. Life science occupiers are not yet as significant as in Oxford and Cambridge, but in Bristol, the wider tech sector is likely to bounce back from a relatively quiet 2023. The out-of-town market is not acutely over-supplied with fairly steady rental levels and limited choice. Prime headline rents stand at £24.00 per sq ft, while 1000 Aztec West, the first major new office space to be delivered for many years in the out-of-town market, stands out as a beacon of optimism in the market with a quoting rent of £28.50 per sq ft and no apparent competition for larger occupiers. The standard of the space in this scheme is comparable with the best city centre stock, and it provides unparalleled amenities for the out-of-town market in the region.
"In addition to growing rents, incentives remain low, and these trends are expected to continue as occupiers seek and are prepared to pay for high-quality space."
"With open storage rents nearly doubling over the last three years and without any anticipated let-up in demand, we expect rents to continue to perform well through 2024 and beyond."
Industrial (T) Part of portfolio (P) TBC (Y) Office (T) £11.5 million (P) 8% (Y) Retail (T) £11.7 million (P) 5.8% (Y)
Type (T) Price (P) Yield (Y)
Data sources: Carter Jonas, RCA, Costar
Office The market for high-quality offices in Cambridge continues to perform well. The talent pool in the market continues to attract companies from the tech and life sciences sector, with companies like Toshiba, BioNTech and Nyobolt have all taken space last year. Take up in 2023 totalled 619,000 sq ft, up 47% year on year and marginally above the five-year average. The most significant lettings in 2023 include Samsung, who took 33,624 sq ft at One Cambridge Square, Cambridge North and BioNTech, who took 80,000 sq ft at 1000 Discovery Drive. Q4 2023 saw further lettings at One Cambridge Square. Ernst & Young took 9,887 sq ft at Cambridge North, and JA Kemp took 5,245 sq ft.Indeed, the most notable letting over the past quarter was serviced accommodation provider Mantle, taking 22,596 sq ft at 95 Regent Street as an assignment at a rent of £40 per sq ft on the ground floor and £32 per sq ft on the upper floors. Lab A shortage of stock continues to hamper occupiers’ ability to expand or enter the market. A number of lab schemes are starting to break ground such as Merlin Place and Vitrum, and the 24,000 sq ft Building A2 at Unity Campus is close to completion, having been pre-let to the drug discovery company Domainex. Just over 50% of the space underway is hybrid, while offices account for 35%. However, the majority will not deliver until the end of 2024 or well into 2025. Two tenants have moved from existing facilities on the Babraham Research Campus to a new cutting-edge lab building in the park in the second half of last year. Mosaic Therapeutics took 6,878 sq ft of office/lab space at £68 per sq ft, and Xap Therapeutics took 10,000 sq ft of lab/office space. The supply/demand imabalance in the market will likely affect take up figures through the year and put further pressure on rents in available buildings, as evidenced by the recent letting to Charm Therapeutics, who leased 13,500 sq ft at Babraham Research Campus at a new record of £71.50 per sq ft on a GIA basis.
Cambridge Science Park Cambridge Biomedical Campus Babraham Research Campus Cambridge Science Park Babraham Research Campus
Dr Reddy's Laboratories NHS Insmed Sandoz Xap Therapeutics
32,991 23,000 17,000 15,868 10,500
OOT OOT OOT OOT OOT
85 East Road
Mackays of Cambridge
ARU
£14.5 million
Gateway Cambridge
Ingredients, Supplements & Methods LTD
25,637
New Lease
Data sources: Carter Jonas, CoStar, Egi, CoStar
*2022 forecast
Confidential
Retail
4.7%
Seller (S) & Buyer (B)
Northern fringe
Labs
5.4%
9%
5.5%
1200
1000
£55.00 psf
Northern Fringe
£37.50 psf
141,115 sq ft
-2%
-4%
£71.50 psf
£14.00 psf
-48%
70,720 sq ft
A continuing lack of supply is out-stripping demand for all unit sizes in Cambridge and surrounding areas. This is particularly true for unit sizes between 10,000 sq ft and 20,000 sq ft. The absence of available allocated B2 and B8 land is putting constraints on the supply of industrial and warehouse space and is forcing occupiers out of the city to areas such as Huntingdon, Royston and Newmarket. Multiple deals at Bourn Quarter, a leading mid-tech scheme on the outskirts of Cambridge, were agreed between £14.50 and £16.50 per sq ft over a range of unit sizes. An increasing number of life science companies are looking to occupy mid-tech units as these are considered a more cost-effective alternative to traditional office and lab space. Schemes such as WrenBridges have been a success and have fulfilled a number of requirements for industrial and warehouse space. For example, 2a Gateway Cambridge (25,637 sq ft) was let to Ingredients, Supplements & Methods at £14.63 per sq ft. Prime trade counter rents remain the same, with the most recent letting at 25 Clifton Road – 2,771 sq ft let to UK Windows and Doors Group at £17.50 per sq ft.
"The serviced accommodation sector continues to thrive as occupiers with a hybrid working structure are attracted to this model's flexibility."
"An increasing number of life science companies are looking to occupy mid-tech units as these are considered a more cost-effective alternative to traditional office and lab space."
Data sources: Carter Jonas, RCA, EG Radius, CoStar
The office market in Leeds has continued to perform strongly in 2023, with a total city centre take-up of 661,943 sq ft, which was 12% above the 5-year average. Most transactions were sub-10,000 sq ft, with the letting to Lloyds Banking Group of 124,000 sq ft at Wellington Place at the beginning of 2023 remaining the standout transaction of the year. The deal shows the continued trend of companies upgrading to high-quality space to meet their ESG requirements. The flight to quality has been evident throughout the whole of last year, with grade A office take up accounting for 73% of the total. Notable deals include the accountant firm Azets taking 11,618 sq ft at 12 Kings Street, while the consultancy Barnett Waddingham agreed to 13,466 sq ft at City Square House, both paid £37 per sq ft. Occupiers’ willingness to pay more for premium space means that prime rents have continued on an upward trajectory, currently standing at £38 per sq ft, compared to £36 per sq ft a year ago. Despite the upward trajectory of rents, they are still among the lowest in the Big Six regional cities. Looking ahead, we anticipate that the availability of grade A office space will remain limited, largely due to challenges associated with development funding. Consequently, headline rents are expected to stabilise. This presents a market dynamic where demand for quality space will likely outstrip supply.
City Square House West Village Central Square The Small Mill Meadow Court
Barnett Waddingham Advisory Insurance Broker Freeths Northpoint Wellbeing EDSB
13,466 11,384 11,270 10,730 10,200
Junction 32 Outlet Village Leftifield Park Auto Dealership
Landsec Marshall Commercial Development Projects Aston Barclay
Frasers Group Leftifield Paloma Capital
Retail Industrial Retail
The industrial and logistics market in West Yorkshire has fallen back from its post-COVID ‘heat’. The slowdown in online spending since the height of the pandemic, combined with Brexit-related depressed demand, has impacted take-up levels. That said, Leeds’ industrial vacancies are currently below 3%, among the lowest across the big industrial markets in the country. A key observation from 2023 is the lack of larger 100,000+ sq ft deals, with the XPO Logistics’ 211,364 sq ft let at Wakefield 41 being the only deal above that figure last year. This underscores a notable scarcity of immediately available larger ('Big Box') industrial units. We note that occupiers are increasingly cost-sensitive, and that new development has been challenging to unlock with escalating borrowing costs and upward yield pressure. Evidently, the space under construction has dropped from about six million sq ft at the beginning of 2022 to under two million sq ft at the beginning of 2024. Speculative developments are expected to decline further as we progress throughout the year. Because of these dynamics, we expect prime rents in the sector to continue their upward trajectory. However, the pace of growth is expected to be more moderate compared to the robust rental increases seen between 2020 and 2022, when rent increased by nearly 20% in that period.
Raymond St Corinium 2 Thorp Arch Trading Estate
Powersheds Renovotec Kellys Welding
31,389 15,472 12,387
New Lease New Lease New Lease
6.6%
8.4%
circa £45 million £10 million Part of a portfolio
TBC TBC TBC
2.7%
3.8%
£8.00 psf
191,146 sq ft
1400
1600
1800
£38 psf
£24.75 psf
112,272 sq ft
-18%
-24%
8%
73,379 sq ft
-67%
-79%
"Leeds’ industrial vacancies are currently below 3%, among the lowest across the big industrial markets in the country. "
Data sources: Carter Jonas, Experian, RCA, CoStar, EG Radius
£62.50 psf
Science parks
69,660 sq ft
Offices The Oxfordshire commercial market in 2023 experienced a mix of fortunes. On one hand, broader economic uncertainties and funding challenges tempered the enthusiasm and commitment of potential occupiers. However, on the other hand, the market witnessed several key transactions. The current funding landscape influenced market activity, with occupiers showing a preference for turnkey solutions, particularly at the Arc Oxford campus. The total take-up for 2023 was 348,641 sq ft, slightly surpassing the five-year average of 330,000 sq ft. A notable challenge is the lack of available office stock, especially in the city centre. This has been compounded by the conversion of several buildings for lab redevelopment, contrasting with the substantial unmet demand for traditional offices. As a result, rental rates have been under upward pressure. This is exemplified by Ryze Hydrogen's lease of 23,143 sq ft at the BREEAM Excellent North Bailey House in the city centre at £62.50 per sq ft. However, caution is advised in interpreting headline rents due to variations in stock, locations, and delivery mechanisms.
Halley Court Harwell Campus Seacourt Tower Sovereign House Park End Street
Wellbeck Thales Vicon Motion Systems Helix Geospace Oxford Policy Management
31,687 10,670 8,287 7,900 5,100
CC OOT CC OOT CC
The Oxfordshire industrial market is currently defined by a notable shortage of available stock. Bicester has proved to be a popular location, demonstrated by the rapid re-letting of circa 500,000 sq ft of units formerly occupied by the EV company Arrival - all within a single year. This scarcity of available stock remains a critical factor potentially curtailing market activity in the industrial sector. Currently, only a limited amount of development is underway throughout the county. Looking ahead, we expect to see an increasing cross-over between the industrial and life sciences sectors, with more new development of, and repurposing existing industrial units into, hybrid/R&D facilities.
£17.00 psf
551,512 sq ft
Tungsten Park Axis Omega Park Oxford Technology Park Rycote M40
Chris Hayter Transport Banford Bus Company Thames Water Oxford Ionics Electricmania
74,305 43,227 43,179 29,661 22,532
5.8%
7.4%
DQ190, Didcot Quarter Nuffield Industrial Estate Lumen House
Diageo Pension Trust IPIF Life Science REIT
AllMakes 4X4 Eskimuir Group Brookfield Asset Management
Industrial Industrial Office
£26.5 million Part of Portfolio £7.65 million
TBC TBC Redevelopment
4.3%
5.1%
5.0%
Science Parks
109%
-16%
81%
61%
"Unlike any previous year, there is now a healthy pipeline of lab stock across the county, with The Oxford Science Park and Mission Street recently completing their Iversen and Inventa buildings, respectively."
Lab Within the life science sector, the announcement of Moderna committing to a 145,000 sq ft new hybrid development at the Harwell Campus and the rapid rate of development by the Ellison Institute to create a 60,000 sq ft world-leading oncology centre in Oxford Science Park are both significant news. Unlike any previous year, there is now a healthy pipeline of lab stock across the county, with The Oxford Science Park and Mission Street recently completing their Iversen and Inventa buildings, respectively. Further new build schemes at The Harwell Campus and Oxford North totalling circa 600,000 sq ft are underway, of which a third has been already pre-let. Additionally, new market entrants are initiating developments, as we have seen with Breakthrough at Trinity House, which has recently broken ground. Looking ahead, the life science market is poised for a pivotal year. Developers and investors are keenly seeking occupational activity especially from tech and life sciences occupier to support future developments. While ongoing funding challenges and the upcoming election may have an impact on take up, the year is set to satisfy several active requirements, offering a clearer picture of the market's performance in 2024.