Oxford’s thriving science and expertise sector is going through a possible hurdle: a essential scarcity of workplace and laboratory house. Based on a brand new report by property consultancy Vail Williams, this shortage might ship rents spiralling upwards within the coming 12 months. The report paints a regarding image. The town, it suggests, has nearly sufficient Grade A workplace and lab house to fulfill demand from life sciences and biotech corporations for the subsequent 12 months. This restricted provide is a stark distinction to the excessive demand, significantly contemplating the sturdy take-up figures from final 12 months, which noticed round 420,000 sq. ft of lab house leased.
The results of this imbalance are already being felt. Rents for conventional workplace house have climbed from the early £30s per sq. foot to the mid-£60s vary, with lab house commanding even larger costs, reaching as much as £85 per sq. foot in some enterprise parks. Watson warns that with the restricted availability of premium house, rents might climb even additional in 2024.
Fuelilng the demand is the strong life sciences sector, which accounted for roughly two-thirds of all workplace and lab house leased in Oxford final 12 months. This progress is additional bolstered by the regular stream of spin-out corporations rising from Oxford College. Watson expects this pattern to proceed, with a wholesome pipeline of college spin-outs actively searching for sizeable workplace and lab areas. This inflow will probably put additional pressure on the already restricted provide, driving emptiness charges even decrease all year long.
Nonetheless, there’s a possible silver lining for landlords with Grade B workplace house. The shortage of Grade A choices presents a possibility for them to improve their properties and cater to the rising demand. Renovated Grade B areas might probably assist alleviate the strain on the premium market.
Whereas the central Oxford space faces a dearth of available house, regardless of the latest completion of the 65,000 sq. foot Inventa lab and workplace constructing, the scenario is barely higher in out-of-town enterprise parks.
Total, the outlook for Oxford’s property market, significantly the workplace and lab house phase, is considered one of pleasure tinged with anticipation. Whereas the restricted provide presents challenges, it additionally signifies the town’s thriving science and expertise sector. The approaching months will reveal how the market adapts to this case, with each landlords and tenants needing to navigate the evolving panorama.
The continuing strain on house in cities reminiscent of Oxford and Cambridge is explored in this function.