OFFICE space demand from fast-growing Oxford University spin-out businesses have seen prime office rents in Oxford grow by 16.7 per cent in a year, new research has revealed.

Leading property consultants Bidwells look twice a year at the office market in the Oxfordshire region and its latest research has highlighted an unsatisfied demand for office space in Oxford’s city centre.

Rents hit £35 per square foot in the first half of 2018, with demand for office floor space now at record levels, with 1.2m sq ft of requirements from 68 registered occupiers.

Oxford University spin-out companies are expected to create around 500 extra jobs each year until 2025 and occupy at least 350,000 sq ft of office and laboratory space by that date.

David Williams, partner, of Business Space Agency at Bidwells, is predicting prime rents will hit £40 per sq ft by 2020.

He said: “Demand from fast-growing Oxford University spin-out businesses is at a three-year high and continues to apply upward pressure on rents in Oxford’s city centre, with prime rents growing steadily over the last five years.

“The Oxford city centre market is dictated by constrained supply created by a number of historical ownership and geographical factors. The impact of this constrained supply – combined with by a lack of new development - means we fully expect these rises to continue.”

Oxford University contributes £5.8 billion to the UK economy, generating more technology spin-outs than any other UK university and producing more start-ups than any other university in Europe over the past decade.

Mr Williams added: “The real challenge is to match supply with this newly-created demand.

“While it’s great the university’s innovation activities are achieving their goals, its value and impact will be diminished if the city is unable to accommodate the companies spawned by this innovation.”

Bidwells’ figures for the first half of 2018 also reveal that:

•Take-up was 269,000 sq ft – the highest half-year total in more than a decade

•59 per cent of take-up was from knowledge-based occupiers (IT, science and bio pharma)

•Grade A office space take-up was 72,950 sq ft

•Availability is 558,300 sq ft, with only 76,800 sq ft in grade A.

More than 80 per cent of Bidwells’ work is concentrated in the ‘Golden Triangle’ of Oxford, Cambridge and London.

Bidwells is one of the UK’s leading property consultancies, offering clients knowledge of, and access to, some of the most interesting real estate markets with the highest growth potential in the UK.

Bidwells’ staff operating in the ‘triangle’ focus on the science and technology and education sectors.

Bidwells’ staff helps investors, developers, occupiers, house builders and home owners to harness the benefits of the exceptional growth in these markets which represent over 44 per cent of all real estate activity in the UK.

In addition, Bidwells has a strong rural presence and manages thousands of square miles of the English and Scottish countryside and coastline.

It is one of the leading consultancies in the high-growth forestry, renewables, and agriculture markets.

These markets have consistently outperformed equities and bonds in recent years and are of significant interest to UK and overseas investors.

Established in 1839, Bidwells has retained many of its original clients, including some of the best-known colleges in Oxford and Cambridge, which are among the biggest landowners in the UK.

Today Bidwells manages over £5.2 billion in property assets and employs 500 people in England and Scotland. Staff are acting as consultants on a major scheme for the redevelopment of Oxpens.