Oil price rebound buoys office market in Granite City

Latest figures highlight key deals at Marischal Square among other locations. Picture: Contributed
Latest figures highlight key deals at Marischal Square among other locations. Picture: Contributed
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Aberdeen’s office market is continuing to recover with the rebound in the oil price contributing to increased demand for space.

New figures reveal that 89,776 square feet of office space was transacted in the second quarter of the year, almost mirroring the result for the first quarter and bringing the total take-up for the first half to 178,550 sq ft.

There have been 50 office market deals transacted over the past six months which is up by about two-thirds from this time last year, according to data from property consultancy CBRE Scotland.

The largest letting of the first half was 19,000 sq ft to Aberdeen Journals, publisher of the Press and Journal newspaper, which secured the top floor of 1MSq, Marischal Square.

Demand from the energy sector was described as “encouraging”, evidenced by the recent lettings to BWO Offshore, securing 10,325 sq ft in Horizons House; Ping Petroleum taking 8,777 sq ft at Caledonian House; Verus Petroleum and CATS Management taking 6,079 sq ft and 4,193 sq ft respectively in The Silver Fin Building; and most recently the announcement of Serica moving to a 7,730 sq ft suite at H1, Hill of Rubislaw.

Recent take-up also indicates that there is activity in the banking sector with RBS relocating from the west end having secured the 7,000 sq ft top floor of 2MSq, Marischal Square and Barclays joining some of the aforementioned occupiers after securing 3,100 sq ft on level six at The Silver Fin Building.

The first half of 2018 set a new record headline rent of £32.50 per sq ft in Aberdeen which was achieved at The Silver Fin and is expected to be maintained in future transactions, CBRE noted.

Amy Tyler from the property firm’s Aberdeen office, said: “We have certainly witnessed an improvement in sentiment in the Aberdeen office market during the first half of 2018.

“This is mainly attributed to the increase in oil price, which peaked at just under $80 per barrel at the end of June from circa $65 per barrel at the start of the year.

“This is beginning to filter through to the office market where we have experienced an encouraging increase in demand for space.

“We are expecting a strong start to the second half of the year with a number of transactions already due to complete over the next couple of months. This take-up will come from a mix of public sector bodies and energy operators looking to improve their working environment on lease expiry of current buildings.”