The city centre and key schemes at the edge of the centre, including Oxford North and along Botley Road, will enable new clusters to emerge and companies from various sectors to find their new home, probably mostly within life sciences. Central to the future growth of Oxford is the ability to attract suitable talent in these key employment clusters.

The map shows the concentration of capital raising since the beginning of 2021 across Oxfordshire. The venture capital deals have been highlighted to represent areas of likely faster corporate growth and future real estate requirements.

Proximity to Oxford and access to the city centre remains the preferred option for some laboratory and office occupiers. There will also be strengthening clusters around the Ring Road providing more commercial property occupational options in the next few years, as well as the creation of a new hub at Oxford North. The arrival of significant philanthropic investment into the city will further drive these clusters.

It is expected that the space cluster will continue to grow at Harwell alongside the food production and climate prediction sectors. The energy sector is a growth sector across Oxfordshire and will attract further capital and see a strengthening cluster of companies.

Who are the key commercial occupiers?

Oxfordshire is synonymous with the life sciences sector, but the capital raising data shows how Oxford has a broader profile of sub-sectors based upon the capital raised.

The charts below show a comparison between Oxford, Cambridge and London. The broadly flatter profile means a lower reliance on any one sector.

But it’s not just life sciences. Although the chart shows the dominance of life sciences in Oxford, what this data doesn’t show is rumoured or upcoming deals. Reviewing this shows other sub-sectors that don’t sit within the top 10 shown in the chart. Energy is a key sector for the Oxfordshire market, specifically the fusion sector centred on the work being undertaken at Culham & Harwell. The UK Atomic Energy Authority has signed for a new 86,000 sq ft research and development facility at Culham Science Centre which has been forward-funded by Legal & General.

This will act as a catalyst to drive further innovation in the sector and help add to the cluster of fusion sector occupiers located at the scheme, which include General Fusion, Reaction Engines and EnerSys. The energy tech cluster at Harwell Campus will also benefit from the increased investment into the sector. There are 80 energy tech organisations based at Harwell which employ over 1,400 people. Globally, the sector has been expanding. £128bn has been raised by companies in the energy sub-sectors since the start of 2019.

Future drivers of demand

The future drivers of demand, in terms of corporate activity, employment growth and economic output, will be a combination of home-grown corporate activity (mainly driven by academic institutions ‘spinning out’ companies of the future) and by inward investment, often from overseas. Oxford is in the fortunate position to be driven by both.

Within Oxfordshire, there is also a clear presence of key philanthropic influences driving demand and capital, notably The Big Data Institute (Li Ka Shing Centre for Health Information and Discovery) which has private funding from the Robertson Foundation. The BDI focuses on analysing large and complex datasets for disease prevention and treatment. This philanthropic presence and facility is attractive to additional Government-related funding, working with the health trusts and will enhance the global reputation of the city.

The more recent philanthropic arrival to Oxfordshire is the Lawrence J. Ellison Institute for Transformative Medicine. The Institute’s purchase of the Littlemore House site (5.9 acres) and subsequently a plot to the south on Oxford Science Park (3.5 acres), has brought a significant investor into the Oxfordshire market and an organisation that already had links with the University of Oxford. Why does this matter to property? Well, this is another ‘honey pot’ within the Oxfordshire market and creates a magnetic force for attracting talent and subsequently corporate in-movers of all shapes and sizes.

Away from just philanthropy, the scale of funds on a global basis, who have an interest in life sciences as an investment preference, is significant. As at the end of October, the estimate is that around £75bn of “dry powder” is available from those funds that would invest in life sciences, including companies and real estate.

Key takeaways

• Oxfordshire is synonymous with the life sciences sector, but what is impressive is that the capital raising data shows how Oxford has a broader profile of sub-sectors including energy as a key sector.
  
  
• Regardless of the sector, the availability of suitable talent will have the biggest impact on the future growth of Oxford.

_{Read the articles within Oxford: A global competitor below.}