Member Article

New research shows Oxford office rents to increase

Office rents in Oxford will reach £30.00 per sq ft by the end of 2019, according to UK property consultancy Carter Jonas which has today published its Commercial Edge Oxfordshire research report. With the rental ceiling of £25.50 per sq ft having been broken in 2014 at Milton Park, allied to diminishing availability of quality stock, and an improving local and national economy, a continued and sustained improvement in prime rents in core business parks and the city centre is forecast for the county.

Jon Silversides, partner, commercial, Carter Jonas’ Oxford office said: “There is greater scope for improvement in the office rentals going forward in certain key locations such as Oxford city centre and key business parks. In 2014, a return in occupier confidence was evident with Oxfordshire office take up totalling 425,000 sq ft, a 128% increase from 2013. Total office availability fell by 14% to 744,000 sq ft, and Grade A availability now totals just 22,732 sq ft in one building at Milton Park of which circa 16,000 sq ft is under offer. The ever increasing lack of available supply indicates a buoyant, diverse and strengthening demand profile from businesses looking to expand or relocate. The extremely restricted speculative development activity will not relieve the urgent requirement for the delivery of new product.

“In Oxfordshire, the planned significant investment in the county’s infrastructure needs to occur, land needs to be released for housing development to accommodate the growing workforce, and new office development needs to start now.

“A skilled labour shortage and lack of commercial expansion land in both Oxford and the principle market towns will continue to challenge companies. However, the growing sense of optimism coupled with the implementation of Government-backed infrastructure places Oxfordshire in a strong position to thrive.”

Catherine Penman, head of research, Carter Jonas added: “Such is the demand for office investment stock outside London, we are forecasting that investment yields in Oxford will harden by between 50 and 75 basis points by the end of 2015. Whist the Eurozone financial unrest and UK General Election remain factors which might impact our forecasts, the UK economy continues its recovery and the interest rate environment looks set to continue. The weight of money in the market remains and Oxford’s office and industrial markets will gain from such investment, and indeed occupier demand.”

This was posted in Bdaily's Members' News section by Olivia Lane-Nott .