It's a confusing picture for Oxford's office and industrial space take up says new report
Take up for office and industrial space dropped in Oxford last year, but the picture is confusing, says a new report from commercial property company VSL & Partners.
According to VSL’s new Intel commercial property report, the uncertainty of Brexit is partly to blame for the dampening of take-up figures, but this was tempered by a buoyant feeling in the market due to the number of successful spinout companies successfully establishing themselves in Oxford.
The reports notes that the number of transactions across the office and industrial market halved last year, compared to the previous year. Just 28 office transactions were recorded in 2019, versus 52 in 2017. And 35 industrial transactions took place last year, in contrast to 49 in 2017.
On a more optimistic note, VSL’s research shows the Oxfordshire commercial property market saw its largest ever supply of new speculative industrial development last year.
A total of 375,000 sq ft of industrial speculative stock was recorded in 2019, boosting supply by 64 per cent to 1.36 million sq ft.
In contrast, the supply of office space remained static, with little speculative development in the pipeline, meaning existing refurbished stock will stay in the spotlight.
VSL director Tom Barton, said: “Further speculative industrial supply is forecast for 2020 and we predict the year will be a new record for stock delivered to the market, providing a further 700,000 sq ft.
“This will dwarf the level of stock delivered in 2019 and reinforces investor and developer confidence in the Oxfordshire market.”
He predicts that new industrial stock this year will focus in and around the market towns of Bicester (230,000 sq ft), Didcot (310,000 sq ft) and Witney (164,000 sq ft), where land has been released via what he describes as “a well-planned local authority planning framework”.
Demand from the science and technology sector, which has dominated the county’s commercial property landscape in recent years, has waned slightly, according to VSL director Richard Venables.
The science and tech sector still accounted for 63 per cent of office take-up last year, compared to 70 per cent in 2018.
But take-up from science and tech businesses in the industrial market dipped to 26 per cent last year, in sharp contrast to 64 per cent in 2018.
“Our records don’t take into account the smaller lettings and there is a strong feeling that spin-out activity continues to be positive, with OSI plc ready to fund the intellectual property emanating from the universities,” Venables explains. Cons
“We believe that this market will bounce back in 2020 as the upswell in start-up companies recorded in recent years mature with second- and third-round funding leading to new property requirements,” he adds.
