Last year saw laboratory space demand and take up soar with laboratories now accounting for 50 per cent of all take up within the Oxfordshire office sector.
Oxfordshire commercial property agent VSL’s 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.
The report revealed that the Oxfordshire office market showed take up was recorded at 384,673 sq ft which was an increase on 18.4 percent and approximately 10 percent above the five-year average.
But the report revealed that laboratory stock is in short supply and will continue to be so in 2022 until the development market catches up with demand in 2023 and beyond.
There is currently only 12,700 sq ft of fitted laboratory stock available in Oxfordshire but a further 4.75 million sq ft of space could reach the market by 2026.
VSL recorded unsatisfied laboratory demand in the range of 400,000-600,000 sq ft with more enquiries coming forward each month. As a consequence, laboratory rents are growing quickly and likely to reach £70 plus in 2022.
Richard Venables, director at VSL said: “The growth in Oxford University spin out companies is now leading to increasing numbers of larger property requirements as these companies receive further funding and seek to move from incubator space. Investors are now moving fast to satisfy this demand but there will be a lag of 18-24 months before this comes online and we anticipate continued rental growth. This is reflected in the record prices being achieved for real estate in Oxford.”
For the industrial and warehouse market the key headlines were as follows:
- 2021 marked another record-breaking year with 1,573,083 sq ft take up in Oxfordshire.
- Supply has decreased by 24.8 percent and VSL anticipates supply to continue to decline in 2022 despite some 370,000 sq ft of new stock coming to the market.
- Rental growth in all locations was recorded with record rents achieved on science and technology focused industrial buildings.
Tom Barton, director of VSL, said: “The sheer speed of the take-up of the new industrial and warehouse product has led to a shortage of good quality available space. This shortfall is likely to rumble through 2022 and mean take-up levels suffer in the coming year. As supply levels decrease in 2022, it is hard not to forecast further rental growth during the year to new record highs.”
Based on number of market transactions, VSL was involved in 75 percent of all industrial transactions and 44 percent of all office transactions in Oxfordshire.