Oxford’s growth economy to insulate against effects of Covid
Office markets across the globe have been exposed to the effects of the pandemic. Large swathes of city centres have turned into ghost towns following stay-at-home orders and big corporates around the world have announced plans to cut their offices.
But there are always winners and losers, and Oxford, according to Radius Data Exchange analysis, appears to be one of the winners.
While the usual dynamics of supply and demand have been disrupted, Oxford remains uniquely insulated from the mounting concerns of an over-supply of office stock.
Office markets across the globe have been exposed to the effects of the pandemic. Large swathes of city centres have turned into ghost towns following stay-at-home orders and big corporates around the world have announced plans to cut their offices.
But there are always winners and losers, and Oxford, according to Radius Data Exchange analysis, appears to be one of the winners.
While the usual dynamics of supply and demand have been disrupted, Oxford remains uniquely insulated from the mounting concerns of an over-supply of office stock.
Oxford benefits from its global status as a university city and a science and technology hub, meaning it continues to attract a strong roster of highly skilled workers – and venture capital investment.
Radius Data Exchange analysis of Valuation Office Agency data shows the city already has ample office space per person per square foot (26.9 sq ft), if not constrained, compared to its Arc neighbours Cambridge (45.5 sq ft) and Milton Keynes (27.4 sqft).
Despite this, take-up in the city has remained robust in recent years, with occupier activity surpassing the five-year average in 2020. Oxford’s wealth of Grade-A life sciences space acted as the main driver as the search for a Covid-19 vaccine continued.
Analysis of EG Propertylink data shows that enquiries for office space in Oxford spiked in the periods of reduced lockdown, seeing higher and faster percentage increases in month-on-month activity than both Milton Keynes and Cambridge.
Average rents have been moving upwards more quickly than those neighbours too, up by 41% since 2016 to £32 per sq ft, while Cambridge and Milton Keynes experienced slower incremental rental growth, up by 30% and 24% respectively.
Fears of an acute shortage of space in the area are already being addressed. Since the start of 2018, the CaMkOx Arc has accounted for more than 35% of all research and development space applied for, according to Radius Data Exchange. No mean feat when compared with the other two of the UK’s great growth corridors – the Midlands Engine and Northern Powerhouse.
Workforce data from the ONS shows there has been a 72% increase in science and tech jobs in Oxford and Cambridge between 2017 and 2018.
It is this growth economy that will define Oxford in the coming years – its relative strength of white-collar workers has meant that just 13% of the town’s employment base was furloughed, compared with the national average of 24%.
Some 57.9% of the working population also has “high-level NVQ4+” qualifications – the UK national average, according to Centre for Cities, is 40.2%.
Oxford is a city well placed to capitalise on a strong foundation of enterprise, highly skilled workforce and should act as a template to others as the UK seeks to level up.
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