The Supply and Demand for Office Space in Oxford – By Mike Foster
Earlier this week, I was asked to participate in a research project about the demands of physical office space in Oxfordshire for innovation and grow-on space.
Here in my latest article, I share a few of my personal thoughts and the responses I shared with my interviewer, especially in relation to the Science and Technology Sector.
There has always been a strong demand for office space in Oxford, but in the last year the volume of serious enquiries has risen. When I say serious, I mean entrepreneurs or researchers with a business model who see the part that physical space can make to impact their growth potential. Whereas perhaps previously other short term factors, such as cash in hand, drove the decision to find other places from which to work.
Are businesses working more collaboratively than before? Is this influenced by the preferred working style of a younger generation or is this how business building in science and technology businesses has developed? Is the level of funding making physical space a more serious option? Does the physical private office space allow for better research and development conversations?
Many providers of office space for businesses in the period of start up, incubation or early stage growth, such as ourselves at the Oxford Centre for Innovation (OCFI), have not consistently been able to service the demand of new start ups or spin outs and have growing waiting lists . This is perhaps due to the fact that the more established businesses have not been able to find suitable space for their growing team, within their established base of the city walls.
This is one of the factors that creates a blockage of flow and the void appears to be for grow on space. If a business has investment and suddenly 25+ staff, then locations such as Oxford Science Park, Oxford Business Park, Milton Park and Harwell have the space. As I also observed during visits to meet other providers, here at OCFI we certainly have businesses squeezing one or two more people into their current floor space. There is office space in Oxford City at the innovation centre or with similar providers, such as the Bioscalator or the incubation space offered by Oxford Sciences Innovation for the businesses that they support, but we are all near or at capacity.
This is one of the reasons that the Oxford Trust have invested in the new Wood Centre for Innovation, to provide the blend of start up and grow on space. Its location is also in the area of “The Hill” where there appears to be shift of location for some innovation businesses.
One additional observation is that there does not appear to be sufficient laboratory space in Oxford City. A high number of enquiries I have managed this year have been for laboratory space in Oxford City close to the University. Yes, there is lab space at other locations such as Oxford Innovation premises in Bicester or Culham, the Magdalen centre, the Harwell Campus and Begbroke, but the demand appears more centrally pulled to the academic resources and expertise at the Universities, up or down the hill.
Recent research providing a view by property experts, Bidwells, highlighted that while the availability rate of Office and Lab space in Oxfordshire has edged up slightly with the delivery of much needed new space, the pressure on the city’s office stock remains driven by the accelerating growth in science and tech employment across the market. They also commented that Prime rents rose by 9.4% over the last twelve months to reach a new high with a further uplift expected in 2019.
The sq ft market rate for office space is certainly influenced by demand outstripping supply and the investment in the fantastic science and technology produced in Oxfordshire is enabling such levels to be met.
I recently met with Peter Wilder of Bidwells and we discussed our similar observations. We are therefore planning an information session, on 29th March, titled; Accommodating Growth – thinking strategically about commercial property. This is to encourage more science and technology businesses to think more strategically, from the outset, about their office space requirement for today, tomorrow and in the future, whilst also considering the options that may be available and the situations that may impact choice.
Despite my desire to encourage more strategic planning, hence collaborating with Peter who knows the local market extremely well, I appreciate that this may be difficult for some businesses. For many young innovative businesses in their early years, such decisions need to remain as fluid as possible. Hence, flexible space such as at OCFI is sought after. I have seen factors, such as the speed of science development or the receipt of funding for people investment to support the growth potential, influence the immediate need to urgently find more space, that may not be currently available. As an example, OCFI has been near 100% occupied for 6 years, with rare movement, so such an immediate demand can sometimes be difficult to supply.
Ultimately the stakeholders in Oxfordshire are aware of the demand and potential for brand Oxfordshire, so it is positive to see high level discussions for change taking place and to be involved in some of the research and contributions.
Also earlier this week, I hosted a Q&A session with the leader of the city council, Cllr Susan Brown. It was a very interesting conversation on this topic and how space in Oxford City, such as that above retail units in the older part of the city, could create much needed grow on space with a little proactive thinking and flexibility around planning.
As always such an article can not cover all considerations, but I welcome any comments or other views of the market, supply and demand.
If you would like to read more articles by Mike Foster, Centre Director, please visit here
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