Office and Lab Shortage Could Force Oxford Rents to Rise

Posted by UK Property Forums on 30th April 2024 -

Partner Mike Watson says the city has around one year’s supply of Grade A space left to support demand from life sciences and biotech sectors.

Vail Williams opened in Oxford in February and Mr Watson, who has worked on commercial property in the city for more than 25 years, is a key member of the new team.

He said: “A lot of the growth in the Oxford office market has been driven by the lack of supply of Grade A office or laboratory stock, which has always been under-served here.

“Given last year’s take-up figures, which were around 420,000 sq ft of lab space, there remains approximately 12 months’ worth of supply left.

“This is driving rents up from the early £30s per sq ft for traditional office space, to the mid-£60s – rising as high as £85 for lab space on some business parks.

“The lack of availability of Grade A and super prime space could push rents on even further this year.”

Last year life sciences accounted for around two thirds of overall office and lab take-up in the city, while spin-outs continue to emerge at pace from Oxford University.

Mr Watson said: “With a healthy pipeline of university spin-outs seeking more than 10,000 sq ft of office or lab space, we will continue to see a fall in vacancy rates throughout 2024.

“This lack of availability also represents an opportunity for landlords of Grade B stock to take up the slack and deliver more newly-refurbished stock to market.”

He said that although available stock to meet client needs was sparse in Central Oxford, despite the newly completed 65,000 sq ft Inventa laboratory and office building, there was better supply at out of town business parks.

He added: “It is an exciting time for the Oxford property market, and we are looking ahead to the rest of the year with a sense of excitement and anticipation – both with office and laboratory market in mind as well as the retail property market, for which we are cautiously optimistic.”

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