Oxfordshire commercial property market hits 7-year peak
The Oxfordshire commercial property market produced its
best performance since 2008 last year according to a report released by leading
commercial property agents, VSL & Partners.
The annual report records statistics for the office and industrial markets focusing on central Oxford and along the A34 ‘Innovation Knowledge Corridor’, providing a clear insight into supply, take up and rents. It finds take up in office and industrial property at a seven year high with supply at an all time low. VSL predicts this will drive an increase in commercial rents across the Oxfordshire region.
The report shows demand is back up to pre recession levels with total take up for office space recorded at 423,700 sq ft, an 83% increase on 2013 figures and significantly above the five year average which is recorded at 260,000 sq ft.
Industrial supply reflects strong demand and is at a new eight year low at 1,218,000 sq ft, an 18% drop from 2013 levels. There is no Grade A supply of new industrial stock in the market and based on 2014’s levels, VSL reports there is less than two years supply of office and industrial property available in the market.
Richard Venables, Director at VSL & Partners explains: “The lack of commercial development over the recession years, and the recent surge in take up has created an erosion of existing stock. With the improving marketing conditions we are now seeing more competition for fewer units, which has resulted in reduction in incentive packages being offered by landlords and increasing rental growth. Based on current 2015 activity we predict a 5-10% rental increase to be realised over the coming years. This rental growth should give developers confidence to bring forward new supply but due to increased build costs, these developments will be at even higher rental levels. Many businesses occupiers might not appreciate that rents have in real terms flat lined over the last 20 years in comparison with other occupational costs such as business rates, staff and energy costs.”
“We believe that Oxford is going through a transformational period of economic development following a decade of under investment and that opportunities for future commercial growth will focus on the Northern Gateway of the county covering Kidlington, Yarnton and Bicester.”
VSL & Partners produces annual market reports providing a valuable insight into commercial property market activity in the Oxfordshire region. To access the VSL 2014 market report please visit http://bit.ly/1FZr4Bo or http://www.vslandp.com
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