Supply has fallen to a record low of 358,900 sq ft in the Oxford office market, according to Lambert Smith Hampton’s 2016 Thames Valley office market report. These market conditions have favoured landlords over the past 12 months and are set to continue for the rest of 2016, with prime rental values expected to reach £27.50 per sq ft by the end of the year.
– Occupier activity has exceeded the 10-year average for a second successive year, driven by out-of-town lettings.
– Supply is at a record low, with 86% of availability situated out-of-town and the vast majority of space in buildings of less than 20,000 sq ft.
– There are very few development opportunities in the city centre, however, ambitious plans are underway out-of-town.
– Prime headline rents have remained stable at a record level of £26.50 per sq ft, following the sharp upturn that was seen in 2014/15.
Kevin Wood, head of office for LSH Oxford, explains: “Take-up in 2015 exceeded the 10-year average for the second successive year and this is underpinned by some larger transactions in the south of the county.
“The lack of speculative development means that the supply profile has worsened and there are now only three buildings in the market that offer grade A accommodation, and only one building that can offer accommodation over 20,000 sq ft. The next swathe of development at Harwell Campus, which will be followed by speculative development at Milton Park, will be aiming to capture the interest from the burgeoning science and tech sector that is becoming more and more prevalent along the A34 corridor.”
