Barclays backs Aberdeen’s prime business park aiming to create 1,200 jobs

By PETER RANSCOMBE
Published on 30/07/2012 00:00

FUNDING will be unveiled today for what is believed to be Scotland’s largest property deal of the year so far, in the latest sign that Scotland’s oil and gas industry remains in rude health.

Barclays will announce a £52 million loan for Drum Property Group, which is building grade-A head offices for North Sea giants Apache, Nexen and Transocean at the “Prime Four” business park on the outskirts of Aberdeen.

Construction work on the first phase of the project, which is expected to add £300m to the local economy, got under way last week, with 1,200 jobs expected to be created.

Drum, which is run by lawyer Graeme Bone and surveyor Paul Doherty, is expected to unveil detailed plans for the remaining three phases of the site, which is located next to the Kingswells park and ride complex, later this year.

Further grade-A office blocks are expected to be built during the other phases, along with a four-star hotel, a leisure club and shops.

The property developer’s previous projects have included work for Marks & Spencer, Tesco and the Thistle Brewery in Alloa. The firm also runs apartments in Aberdeen and Glasgow.

Construction work will be carried out by Sir Robert McAlpine, the contractor that build the Olympic stadium in London and the M74 motorway extension in Glasgow. Work on the initial phase is expected to be completed in August 2013.

Jamie Grant, head of property and project finance for Barclays in Scotland, said: “This is a substantial property transaction not only in the Aberdeen property market, but also the wider Scottish economy, which will result in a world-class oil and energy business hub Aberdeen can be proud of.

“Drum Property Group have identified demand from occupiers for a master-­planned, landscaped business park in Aberdeen that will serve as an international growth centre for the region and we are committed to supporting the development.”

With oil prices continuing to hover around $100 a barrel, Europe’s oil capital is continuing to enjoy investment. In 2010, some £14 billion was spent on exploration, development and operation in the area, with 28 of Scotland’s largest 100 companies located in Aberdeen, according to Barclays.

But the North-east is also benefiting from a boom in Scotland’s food and drinks sector, with exports hitting a record high last year of £5.4bn, a rise of 38 per cent in the past four years, driven by demand for whisky in fast-growing emerging markets.

News of Barclays’ investment in the project comes just days after investment manager Foreign & Colonial’s real estate investment trust (F&C Reit) sold Wellheads Industrial Estate in Aberdeen to clients of CBRE Global Investors for just under £20m. The 220,000sq ft industrial estate has 37 units, with tenants including Flangefitt Stainless, Global Energy and Rolls Wood Group.

Knight Frank and Harper Macleod represented CBRE Global Investors, while Franc Warwick and Maclay Murray & Spens represented F&C Reit.

The deal gave a net initial yield of 7.61 per cent per year, rising to 8.78 per cent. The current rental income is slightly in excess of £1.6m a year.