OXFORDSHIRE COMMERCIAL PROPERTY SURVEY REPORT

Review of 2003

Oxonian Park, Kidlington. The latest speculative industrial development in Oxfordshire is being undertaken by Land Securities and Albion Land comprising 12 units from 5,800 - 19,000 sq ft targeted at both hi-tech and the light industrial/distribution sectors. Summary Demand Supply

● Oxfordshire continues to benefit from ● Grade A office space has increased its balanced local economy, creating a by 30% over 12 months but this does strong regional market. not constitute a significant over supply. ● Applicant enquiry levels only ● Grade A industrial space has more increased towards the end of 2003. than doubled and it is the schemes ● Take up levels in the office sector were with units over 20,000 sq ft which are similar to 2002 with the majority of failing to let. transactions occurring in the second ● Very limited new speculative office or half of the year. industrial schemes are planned to ● Two large industrial lettings occurred complete in 2004. in Banbury and Didcot but general ● Consolidation in the bio-technology demand for industrial accommodation market has led to the release of is for less than 15,000 sq ft. significant levels of large surplus ● Office rents were static, whilst accommodation. incentives increased if tenants were ● More freehold opportunities are being prepared to commit to leases or more marketed as developers react to than 10 years. occupier demand. ● Industrial rents increased slightly with ● Supply of commercial development tenant preference for shorter leases land is still very restricted. minimising incentives. issue two . spring 2004

Office Market in 2003

Take up in the first six months of 2003 equalling the figure for 2002. 95% of all Top Rents was very poor reflecting general Grade A lettings and 64% of the total economic uncertainty but this increased office lettings occurred in the second half Grade A rentals continue significantly in Quarter four. Grade A of 2003. Total office take up in 2003 was to be in the order of office take up reached 175,000 sq ft 503,000 sq ft. £21.00 - £22.00 per sq ft.

In the last 12 months rent free incentives have increased by 50% from Major office deals in 2003 - Over 10,000 sq ft approximately 12 months to 18 months in respect of Sungard 3 Park Square, Milton Park 11,840 sq ft Grade A offices over 10,000 sq ft let on Critchleys Greyfriars Court, 15,700 sq ft institutional lease terms. Mirada Solutions First Floor, Beaver House, We continue to forecast Street, Oxford 16,000 sq ft that office rental levels will stabilise for the foreseeable West Oxfordshire future and rent incentives Housing Association Station Lane, 18,000 sq ft will reduce once supply is eroded. Total Communications Willow Court, Minns Business Park, Infrastructure Botley, Oxford 20,000 sq ft Oxford 10 Year Rental Graph Amey The Sherard Building, The Oxford Science Park 27,400 sq ft Grade A office headline rents, Manches The Oxford Business Park 35,000 sq ft 1992 -2003

2003 Schlumberger Lambourn Court, Abingdon Bus Park 35,000 sq ft

2002

2001 Oxfam The Oxford Business Park 85,000 sq ft

2000

1999

1998

1997 1996 Current Office Market Conditions 1995 1994 The current supply of Grade A stock is Office availability in Oxford City Centre 1993 221,000 sq ft in the County. There is has reduced by 45% to 45,000 sq ft and 1992 approximately 100,000 sq ft of new office one surprise in 2003 was the letting of

14 15 16 17 18 19 20 21 22 stock planned to complete in 2004 at 46,000 sq ft in the City Centre, reversing the Rent per sq ft (£) per annum Harwell, Milton Park and , decline in interest that had previously been Oxford. No new speculative development is recorded. planned to complete around the Oxford Ring Road in 2004 for the first time in 10 years. In comparison, office availability on the Oxford Ring Road is now approximately Second hand stock stands at 325,000 sq ft. The total lettings in 2003 were approximately 840,000 sq ft. This 266,000 sq ft demonstrating a strong represents a 50% increase from 2003. A demand for accessible locations. significant proportion of this increase can be attributed to the consolidation in the bio- technology market and the off loading of premises by Celltech and Vernalis. Within this figure 30% relates to 6 buildings over The Danby Building, The Oxford Science Park 20,000 sq ft. 55,700 sq ft headquarters office building available to let.

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Industrial Market in 2003

Take up in the industrial sector was more ASDA demonstrating a demand for large balanced over the year than the office distribution units still exists in Banbury and Top Rents sector with a total take up of Didcot. Excluding these two transactions 1,285,000 sq ft in 2003. This was boosted the average letting size was approximately Prime rental levels by two significant lettings to Exel and 15,000 sq ft. increased slightly in 2003 from £7.50 to £7.75 per sq ft.

We continue to forecast Major industrial deals in 2003 - Over 10,000 sq ft that rental levels will remain stable for the CW Headress 7 Witan Park, Witney 17,000 sq ft foreseeable future.

Magnex Scientific Units 11 & 12, Oxford Industrial Park 21,000 sq ft Oxford 10 Year Fresh Direct Site 1, Bicester Park 32,000 sq ft Rental Graph Grade A industrial Powwow Unit A, Bicester Park 37,700 sq ft headline rents, 1992 -2003 Penlon Abingdon Science Park 41,000 sq ft

2003 Brita Water Filters Network 9, Granville Way, Bicester 62,000 sq ft 2002

2001 Miele 5 Nuffield, Abingdon 88,000 sq ft 2000 Exel Banbury Cross, Banbury 102,000 sq ft 1999 1998 Asda Didcot Power Station Site, Didcot 450,000 sq ft 1997 1996

1995

1994

1993 Current Industrial Market Conditions 1992 4 5 6 7 8 There is 295,000 sq ft of new Developers are now looking to Rent per sq ft (£) per annum accommodation available to let within rejuvenate some of this older stock 5 schemes in the County. Take up such as at Nuffield Centrum, Nuffield continues to be slow for units greater than Way, Abingdon where units from 6,000 - 20,000 sq ft. In order to make these more 18,000 sq ft are being refurbished. No attractive, landlords are now also new speculative industrial schemes are prepared to consider freehold sales as anticipated in 2004 due to high supply well as more flexible lease lengths. levels and lack of available suitable sites.

Good interest is being shown in the Demand for new freehold/long recently completed schemes at leasehold units of less than 5,000 sq ft Oxonian Park, Kidlington (126,000 sq ft) remain very buoyant with strong interest and The IO Centre, Banbury (70,500 sq shown on new schemes at Kingston ft) which are focusing on smaller unit Business Park, Kingston Bagpuize and Park 34 Southmead Industrial sizes. Secondary stock remains static at the Abingdon Business Park. Estate, Didcot. Three remaining units from approximately 1.4 million sq ft compared 14,400 – 50,700 sq ft available to with 2003. This is still concentrated The market for small industrial units of let or for sale. around Banbury (350,000 sq ft), Bicester less than 3,000 sq ft remains generally (250,000 sq ft) and Abingdon/Didcot quite buoyant. (730,000 sq ft). In contrast there is only 44,000 sq ft available space adjacent to the Oxford Ring Road.

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Development Land

There were no significant land deals in locations such as at the Dairy Crest site Oxfordshire Oxfordshire in 2003 reflecting a severe in Langford Lane, Kidlington which is shortage of sites especially for owner currently on the market. Despite the occupiers and smaller developers seeking current supply statistics for leasehold Fact File to acquire plots of less than 5 acres. properties, developers and occupiers are keen to exploit the advantages of freehold ● There are over 295,000 Intense competition is experienced developments where sites are available in sq ft of serviced office where sites are available in good well located positions. facilities available in Oxfordshire with the largest provider being the Oxford Centre for Innovation with 120,000 Commercial Property Forecast for 2004 sq ft in 9 centres.

● The Despite the general economic Take up levels are anticipated to occupies approximately downturn, Oxfordshire produced average remain static or increase slightly in 4.3 million sq ft of take up figures for both office and tune with the general economic administrative, teaching industrial properties over the year 2003. conditions. Larger relocations to and research Oxfordshire will continue to be accommodation within Rental levels continue to stabilise in constrained by employment and high the City of Oxford. both the office and industrial sectors. housing costs. Rent free incentives have reached their ● The unemployment rate peak and because of the lack of planned Transactions in Q1 2004 have included for the County is development in 2004, further Grade A 8,000 sq ft at Seacourt Tower to currently just under 1%. take up may result in incentives reducing. Yorkshire Bank and Grant Thornton and 24,400 sq ft at Park Square, Milton Park ● The average house Spin out companies from the University to Taylor and Francis. price within Oxfordshire of Oxford and Oxford Brookes is £229,674. University continue to be an important The County investment market will part of the local economy but funding continue to be tight. There will be a (Source: Land Registry) availability remains the key issue. strong level of demand for well secured investments, at competitive yields. More opportunities for freehold properties should be available in 2004 as There is strong interest from retailers developers find sites and focus upon these for shop units in Oxford City Centre. The opportunities such as at Wootton Business proposed completion of the Oxford Prison Park to the south west of Oxford. site in early 2005, comprising a hotel, 9 restaurants and a museum will create a boost to the tourist market.

VSL & Partners

Venables Sherrott Lockhart & Partners Landlord and Tenant, business rates and comprises 6 Directors with a combined property management issues. We have experience of over 90 years in the an impressive level of market knowledge Oxfordshire market. We are able to and experience enabling us to give the provide advice on all property matters very best property advice and service to including estate agency, valuation, our clients.

Venables Sherrott Lockhart and Partners Ltd For more information contact: Richard Venables BSc Hons MRICS [email protected] Suite E, The Kidlington Centre High Street, Kidlington Richard Sherrott BSc FRICS ACI Arb [email protected] Oxford OX5 2DL Andrew Lockhart BSc MRICS [email protected] Tom Barton BSc Hons MRICS [email protected] t 01865 848488 Richard Gamlin FRICS [email protected] f 01865 856940 Vivienne Spurge BSc Hons FRICS [email protected]

(Office data based on properties over 3,000 sq ft: Industrial data based on properties over 5,000 sq ft. Grade A property defined as brand new high quality specification buildings) www.vslandp.com