Experts at property consultants Cluttons Styles & Whitlock offer an overview of current trends in the commercial, retail and educational sectors in Oxford.

A ‘two-tier’ office market is developing in the city, according to Mike Watson, an associate in the commercial division.

He said: “We have noticed a cyclical change in tenant behaviour in Oxford recently. During the late 1990s and early 2000s, tenants were attracted by the accessibility and modern facilities of the Oxford ring road business parks.

“However, over the last two years prospective tenants have increasingly shown greater interest in the city centre, as the allure of a high proportion of shops and good public transport links proves strong.”

An example of this is a recent city centre letting that Cluttons Styles & Whitlock (CSW) advised on at 59 St Aldates to video game developer Exient, at a rent of £19.75 per sq ft.

Mr Watson added: “This change in tenant preference has led to the emergence of a two-tier office market in Oxford One — the highly sought-after city centre with particularly short supply — and the other, a ring road market currently experiencing an unprecedented lack of demand.”

The retail market, perhaps contrary to expectations and economic circumstances, has continued to find steady demand for city centre premises. During the last year CSW found occupiers for several secondary shops, putting Pod Shop into 86/87 High Street, Mr Simm’s Olde Sweet Shoppe into 52 High Street, local traders into 50 High Street and 14 Turl Street, and Harvey’s of Oxford into 1 Woodstock Road.

The firm has also been instructed by the Winston Group in its development of a scheme of six shop units on ground floor and basement totalling 7,000 sq ft at the corner of Little Clarendon Street and Walton Street, about a mile north of the city centre, for which Oxford City Council has recently granted planning permission.

Rupert Sheppard, a partner in CSW’s commercial division based in Oxford, said: “Although demand for these shops is not as strong as we would have anticipated prior to the credit crunch, there remains a hardcore of sophisticated, if small scale retailers who understand local demand for their products, and are prepared to take leases of up to 15 years at rental levels no lower than the pre-credit crunch.”

Educational demand for property in Oxford is two-fold, with institutions requiring teaching space and the students who use these facilities requiring living accommodation.

The city’s prestige as a place of learning ensures the desire for academic institutions to locate in the city remains high.

Terms have recently been agreed with two private educational establishments which are expanding their city centre operations, 1 Alfred Street and 50 New Inn Hall Street, totalling 3,767 sq ft and 3,895 sq ft respectively.

Recent legislation changes to student study visas have caused a certain amount of concern among the private education sector, fearing a drop off in the numbers of foreign students enrolling on courses in the city.

But this has been more than counter-balanced by the decline in the value of sterling, encouraging foreign students to enrol, and Oxford is currently experiencing one of its busiest years to date.

With record student numbers in the city, the capacity to offer en suite city centre accommodation becomes ever more profitable.

Traditionally, the Oxford colleges have cornered this market, but over the course of the last few years, private operators have emerged as new competition to the old educational houses.