Hurricane Energy’s announcement of what it hailed as the largest undeveloped oil find in UK waters has lifted spirits in the commercial property market in Aberdeen.
The news in March that Hurricane’s Halifax prospect and the nearby Lancaster field could contain a billion barrels of recoverable oil added to the mood that a corner has been turned.
We have recently seen the strongest quarterly take-up of office property in and around Aberdeen since 2013.
Take-up in the first quarter of 2017 totalled 181,000sq ft, or nearly as much as the 183,000sq ft acquired over the whole of 2016.
A number of large deals have concluded recently, including French oil giant Total taking an assignation of 108,000sq ft of office space in Subsea7’s old west campus building in Westhill.
We expect this improving trend to continue throughout 2017 as the long-awaited Aberdeen Western Peripheral Route has a positive influence on the local market.
At the smaller end of the market, we have recently concluded a number of lettings of small industrial units.
As well as start-up businesses looking to capitalise on the upturn, we are seeing relatively strong interest from local investors.
There is certainly a lot of available stock on the market but not as many potential occupiers chasing it as landlords would like.
It remains a tenants’ market and landlords will need to be flexible about the terms they offer.
Many landlords and occupiers have been adversely affected by significant increases in the recent business rates revaluation. The impact of this came soon after changes to empty property relief, which have affected industrial landlords in particular.
A support package from the Scottish
Government limiting rates increases for the hospitality sector and office premises in Aberdeen and Aberdeenshire is limited to 12 months which serves only to delay the full impact of the rise.
The Aberdeen City Region Deal and associated £400million Nigg Bay development will bring commercial opportunities to the city, including retail space for cruise ship passengers.
All in all, there are grounds for believing the season for optimism in the Granite City is here again.
Kevin Jackson is a senior associate in the Aberdeen office of property specialist DM Hall
Recommended for you
