Like many of the UK regional markets, Oxford’s office and industrial sector has faced challenging times over the last few years.

Look a little closer however, and we see that both markets, despite the doom and gloom, are beginning to show pockets of progress, with occupiers expanding and a new development pipeline that is expected to help drive the market forward.

The Oxford industrial market is anticipated to see a slight increase in take-up by the end of 2012 on last year.

Whilst the sector has, in the main, seen marginal occupational activity over the year, there has been significant investment along the M40 corridor and a major uplift in the market.

To the south of the region on Milton Park, landlord MEPC has demolished 230,000 sq ft of former BAT buildings to make way for new design and build-led development.

The adjoining 80,000 sq ft, has been let to Allmakes, the Land Rover accessories wholesaler. Within Milton Park’s new Enterprise Zone, the first speculative industrial development for some time will be completed over the next couple of weeks with two of the 12 units already let to Formula One supplier 3D NC.

Also, the Diageo pension scheme has bought close to 60 acres of land close to Didcot Power Station. Whilst this is a strategic purchase by the pension division producing a good return from the existing land and buildings, the land also offers the potential for future large scale distribution development.

Meanwhile, wholesaler Booker has re-occupied its 250,000 sq ft distribution complex at Didcot to operate its Chef Direct division and DHL has moved back into 180 Milton Park along with Panalpina.

Looking at the west of the region, two new developments are underway in Witney intended for mixed-use schemes.

And both motion capture specialist OMG and motorcycle accessories firm Oxford Products have made land purchases in the town to facilitate future expansion and the Leafield Technical Centre has been sold to Team Lotus.

In the north, the wholesale and trade counter market in Bicester has been boosted by lettings to Screwfix and Topps Tiles at Bicester Trade Park and the region has seen continued investment and economic development along the London to Birmingham M40 corridor.

The Albion Land ‘Network Bicester’ proposal on 50 acres, announced in May, is hoped to help regenerate some additional activity in Bicester along with the expansion of Bicester Village. This will be further enhanced with the new homes under construction at Kingsmere — the gateway to the town.

Further north, Albion Land, Barwood and AC Lloyd’s land purchases in Banbury should contribute close to £100m worth of commercial property development and investment in the next five years.

Other highlights in Banbury include motorsport firm Prodrive’s acquisition of more than 200,000 sq ft on 25 acres for a new manufacturing facility with a new substantial retail development proposed on its existing site by LXB retail.

Meanwhile, Albion Land’s ‘Network M40’ industrial and warehouse scheme is committed with phase one totalling 130,000 sq ft pre-let to auto parts supplier First Line and investment forward sold to the Associated British Foods Pension Fund. The Phase 2 site of 37,000 sq ft is pre-sold to engineering firm Goodrich CTG.

When looking at the Oxford office market, the latest deals show encouraging signs of growth with local occupiers expanding their businesses.

This was the case for both the patent agent, Marks & Clerk, who increased the space it occupies by 60 per cent in July with a move to Oxford Science Park and more recently Natural Motion, the game technology company, which has doubled its space in a move from Jericho to Ramsey House (pictured above) in the city centre.

Headline rents for Grade A office space have remained stable throughout 2012 standing at just under £20 per sq ft, largely due to a low level of take up and lack of good enquiries.

But there have been no new offices built for four years and the supply of Grade A space continues to diminish. Overall supply has marginally increased since 2011 with second hand stock including Broadfield House, Between Towns Road and Windrush Court coming onto the market. The latest supply figures currently stand at approximately 625,000 sq ft.

Take-up figures in units above 5,000 sq ft for Oxfordshire currently stand at about 87,000 sq ft and we expect little more than 100,000 sq ft of take-up by the end of the year, which would be a drop of 11 per cent on 2011 figures, excluding pre-lets.

Meanwhile, incentive levels on the business parks have remained at 18 months rent free on five year leases with larger inducements for those tenants signing for ten years or longer with no break. We predict that in 2013, incentive packages will start to diminish as a precursor to any rental increases.