Positive Market Signs ..................? B4 Article Autumn 2013
Following the long hot summer of 2013 it seems it is not just the meteorological climate that has improved. Upbeat economic data now appears to be reflected in the Oxfordshire commercial property market.
Despite a very quiet summer with little market activity we can now point to three significant changes that lead us to believe that times are changing. Firstly, we are now receiving enquiries from businesses who are talking about growth and expansion rather than discussing downsizing and reletting of surplus property.
Secondly, the speed of commercial property transaction is quickening. For the last 5 years landlords and vendors have sat patiently whilst tenants and purchasers pick holes through contracts and try and chip on prices. This week saw the completion of a complex 50,000 sq ft warehouse acquisition within 8 weeks and where the new occupier has been pushing hard for completion so they can install newly ordered equipment for their expanding business.
Thirdly, office stock levels are reducing at a greater pace due to a combination of increased take up and vacant stock being converted to residential use. This week we celebrated the completion of the letting of the final suite of Northbrook House on The Oxford Science Park where we have now let 6 offices totalling 24,000 sq ft over the last 4 years with generous rent free incentives and numerous bicycles as additional bait. Following the change in planning laws allowing conversion of office to residential use we calculate that approx 80,000 sq ft of secondary (or even tertiary office buildings) are likely to be taken out of the available office stock. Whilst this might appear to take away opportunities for emerging businesses the reality is that many of the buildings are now obsolete and do not provide the type of space modern businesses require. We believe this reduction in stock will give developers the confidence to consider new office development.
We therefore hope that this positivity breeds further activity.
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