An 11 storey office block in Aberdeen has sold for just £20,000.
The Salvesen Tower, overlooking the city’s harbour, was once valued at £5 million.
But it has been hit by the oil and gas slump and by crippling business rates.
The tower, completed in 1977, sold at auction complete with a pub attached, a warehouse and 112 parking spaces. It fetched just 0.4 per cent of what it was once worth.
Last night leading north-east surveyor and partner at Knight Frank said the excess supply for office space and little demand, coupled with business rates, would likely result in more buildings going for a fraction of what they are worth in future to make way for residential housing.
Mr Shearer said Custom House on Guild Street recently sold for £1m despite being valued at around £4m, while the KMD building on Wellington Circle is due to go for auction with a reserve price of £350,000 when it was valued at around £3.5m.
He said: “The buildings are worth nothing without tenants and when you have to pay out hundreds of thousands of pounds in business rates on vacant properties owners find themselves left with little choice but to sell for a ridiculously small sum or to knock it down. The problem you find with buildings like Salvesen Tower is that it could cost more than £1m to demolish given it was built around 30 years ago. The costs of the disposing of asbestos, for example, is high.”
Mr Shearer said it was disappointing given the buildings were still serviceable, despite possibly needing some work.
Before the sale the owners of the Salvesen Tower, next to the Shetland ferry terminal, were receiving around £124,000 in rent annually with the few tenants that they had within the 3,994.35sq m of space.
However Mr Shearer said when he calculated the costs in business rates for the vacant space he expected they would total around the same as they had been taking in. North-east Scottish Conservative MSP Tom Mason said: “I would like to see the tower full of firms doing well, despite the hurdles placed in front of them by their own government.
“If that same tax regime has forced owners to sell up, that’s a grim indictment of how the SNP treat business.”
Minister for Public Finance Kate Forbes added: “Our reforms following the Barclay Review of Non-Domestic Rates will support growth, improve administration and increase fairness for all rate payers. We have consulted widely on its implementation and are currently analysing responses.”