Oxford office rents set to rise – Savills
A lack of Grade A office space in Oxford and a sustained level of demand means that the pendulum of power looks set to swing back in favour of landlords, says Savills in its most recent Oxford Market Watch.
Last year was not a record year for take-up of Oxford offices, with a total of around 106,000 sq ft representing a drop of 12% from the previous year (excluding prelets) but current supply is just 625,000 sq ft, of which only around 70,000 sq ft is Grade A quality, Savills notes.
Nick Berrill, director of commercial agency at Savills, says that no new offices have been built in Oxford during the past four or five years and the city now faces “a serious lack of Grade A space”. Headline rents are currently around £20 per sq ft but this is now set to rise over the next few years, he says, while levels of incentives are also likely to fall as the competition for new space intensifies.
Developers might take this opportunity to start some new schemes in Oxford as a result, he adds, but this will only be an option for those that have funding in place.
The research by Savills shows that there has been an increase in tenant expansion in Oxford, including two deals on which the firm advised: a move by patent agent Marks & Clerk from Oxford Business Park to Oxford Science Park that increased the space it occupies by 60%; and a doubling of space occupied by game technology company Natural Motion in a move from Jericho to the City centre.