Motorway helps business

The spring market survey, published by property consultants FPD Savills, says strong economic growth in the region last year had a positive impact on both office and industrial markets, which saw rents for prime office space rise by 25 per cent.

Record rents are being achieved for industrial and warehouse space. The biggest amount of speculative commercial development in the past decade is currently being undertaken in the region. Oxford and High Wycombe achieved more than double the rate of take-up of office accommodation than the rest of the M40 corridor.

The report says that there are tentative signs that this may be the beginning of a new trend, with increasing demand from high technology companies anticipated, as such businesses find it increasingly difficult and costly to find suitable premises along the M4 corridor. The survey reveals that 75 per cent of occupiers now want

out-of-town locations suggesting that town-centre congestion and car parking continue to be major issues.

Another reason is that there was limited speculative development in town centres during 1999.

In Oxford city centre, there has been no new supply since the early 1990s.

Mr Richard Venables, of FPD Savills' Oxford office, said: This is because there is lack of suitable development sites, partly due to competition from residential developers and the University.

It is known that in some cases residential developers are prepared to pay two or three times the value of a commercial site if it can be used for high residential use. There are only seven prime buildings available amounting to 13 per cent of total available office space and agents predict that pre-lets are inevitable during 2000. The remaining 87 per cent is classified as secondary accommodation.

Following a record year of office demand of 564,000 sq ft in 1998, take-up in 1999 rose by a further one per cent to 569,000 per sq ft.

Average prime office rents rose by 25 per cent last year to an average 18.75 per sq ft.