Office and lab space in Oxford remained popular among science and technology organisations in 2023 despite challenges.

This is in spite of reduced venture capital investment and macroeconomic obstacles, according to Bidwells, a property consultancy firm.

The total demand dropped to 414,000 sq. ft from 505,000 sq. ft in 2022 but take up has persisted in line with the long-term average.

Despite a drop from 261,000 sq. ft in 2022, lab space take up reached 211,000 sq. ft, still exceeding average activity levels, with prime rents rising to £76.50 per sq. ft.

Bidwells predicts a decrease in lab vacancy rates this year following a jump at the end of 2023 due to new space arrivals in the market.

Yields for lab space increased to 4.75 per cent, reversing the tightening seen after the pandemic, but these could be the peak rates in the present cycle if interest rates are reduced.

Prime office rents in Oxford reached a new peak of £60 per sq. ft.

Robert Beatson, head of office and laboratories Oxford at Bidwells, said: "As long as Oxford continues to be a world leading centre of excellence for science and as the pace of medical innovation and drug discovery continues, commercial space in the city will attract significant, long-term occupier demand from participants in these industries."