Laboratory space in Oxfordshire is in such short supply rents could reach £70 per sq ft in 2022.
The just-published VSL INTEL annual report for 2021 states that lab space now accounts for half of all take-up.
The report says only 12,700 sq ft of fitted lab space is currently available while 4.75 million sq ft could reach the market by 2026. Take-up last year was recorded at 384,673 sq ft, an annual increase of 18.4 per cent.
VSL suggests supply will not catch up with demand until at least 2023.
VSL director Richard Venables said: “The growth in Oxford University spin out companies is now leading to increasing numbers of larger property requirements as these companies receive further funding and seek to move from incubator space. Investors are now moving fast to satisfy this demand but there will be a lag of 18-24 months before this comes online and we anticipate continued rental growth. This is reflected in the record prices being achieved for real estate in Oxford.”
The report also notes 2021 was another record year for the industrial and warehouse market with take-up at 1,573,083 sq ft in the county.
Supply has decreased by 24.8 per cent and VSL anticipates supply will continue to decline in 2022 despite around 370,000 sq ft of new stock coming to the market.
Rental growth in all locations was reported with record rents achieved on science and technology-focused industrial buildings.
VSL director Tom Barton said: “The sheer speed of the take-up of the new industrial and warehouse product has led to a shortage of good quality available space. This shortfall is likely to rumble through 2022 and mean take-up levels suffer in the coming year. As supply levels decrease in 2022, it is hard not to forecast further rental growth during the year to new record highs.”
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