Flurry of Aberdeen office lettings takes city's Grade A vacancy to lowest on record
Property experts said Aberdeen’s office market had seen a significant increase in deal flow thanks to a strong oil price as they unveiled one of the city’s largest deals in recent months.
UK oil and gas heavyweight Harbour Energy has secured 34,000 square feet of Grade A office space at Prime Four Business Park in Kingswells, in a deal brokered by commercial property consultancy Knight Frank. The energy company will occupy the entirety of a two-storey office building on the park.
The deal marks the third property transaction in Aberdeen in the past year involving UK energy majors. Shell relocated to 100,000 sq ft of prime office space at the Silver Fin Building on Union Street and BP extended its vast 192,000 sq ft lease at Stoneywood - the Granite City’s largest office transaction of 2023 - with Knight Frank also involved in those deals.
Eric Shearer, head of office at Knight Frank Aberdeen, said: “We would like to express our gratitude to our clients and the other agents involved for getting these deals done. It has become increasingly clear in Aberdeen over the last 12 months that occupiers need to plan for the future and provide high quality accommodation for their staff, in order to encourage them back to the office.
“The health of the Aberdeen commercial property market is still fundamentally tied to the price of Brent crude, which has thankfully been trending at more than $70 per barrel for the last two years,” he added. “This is driving strong occupier demand for commercial real estate and a significant increase in deal flow since the lows of the pandemic and that is making it more competitive for occupiers that want to secure the best space. Planning ahead will be more important than it has been for some time.”
The firm said there were “emerging indications” that it was proving more difficult for occupiers to secure the right property in the city, which suggests the gap between supply and demand is beginning to close. Top-quality Grade A vacancy has dropped to under 2 per cent - the lowest on record for the city.
Matt Park, partner at Knight Frank Aberdeen, added: “The emphasis on prioritising high-quality space, which has been evident since the beginning of the Covid-19 pandemic, remains a noteworthy trend. Occupiers are placing a growing importance on the highest quality buildings in their decision-making process and, as a consequence, Grade A availability has dropped to a record low.”
The modern two-storey office building secured by Harbour Energy is arranged over four wings, and its maintenance and engineering installations are said to incorporate a range of low and zero-carbon technologies to reduce energy consumption. Knight Frank represented Schlumberger, the current occupier of the space, with FG Burnett acting on behalf of Harbour Energy.
Towards the tail end of last year, Knight Frank reported that Edinburgh’s office market was “moving in a positive direction”, despite a dip in take-up during the summer.
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