Latest research by global real estate adviser CBRE has revealed a healthy start to 2020 for Aberdeen’s office market, with a total take-up of 170,500 sq ft for the first quarter. This represents a 362% increase on the Q1 2019 figure, and a 72% increase on the five-year average for Q1.
There were a total of 19 deals, averaging 9,000 sq ft, with majority of transactions were focused on best quality Grade A office space. The largest letting of the quarter was out of town, with Equinor securing the remaining 15,000 sq ft of office space attached to its existing HQ at The Forecourt Office, taking its footprint at Prime Four up to 60,000 sq ft. Ponticelli sub-let 10,000 sq ft at Rever Offshore’s office at Atmosphere 1, Westhill, on the back of contract wins with Total. In the city centre Neo Energy moved from a 6,000 sq ft suite on the 8th floor of The Silver Fin Building to take the entire top level 9th Floor, which extends to 12,700 sq ft, whilst in the West End, Global E&C acquired 10,000 sq ft at 27 Albyn Place and Bank of Scotland took 7,000 sq ft at 33 Queens Road.
There was also sale activity in Dyce, with Stork acquiring Aker Solutions’ former office HQ, The Quad (55,500 sq ft), for owner occupation at auction and Alba Gate (c. 28,000 sq ft) formerly occupied by Helix, sold to Alba Gate Developments.
Supply in the city currently sits at 2.4m sq ft – down 15% from this time last year, with further depletion of best quality Grade A stock as a consequence of take up this quarter.
Commenting, Amy Tyler, senior surveyor at CBRE in Aberdeen said: “This was a very encouraging start to the year, with a healthy final take-up figure despite a number of deals being postponed over the last few weeks.
“Q1 activity prior to the pause in activity triggered by the coronavirus pandemic shows that interest in both peripheral locations and Grade A city centre stock remained strong, and it was positive to see the Global E&C and Bank of Scotland deals together with some smaller lettings demonstrating continued demand for prime West End office buildings.
“Looking ahead to Q2, the impact of the pandemic on the energy sector together with a significant reduction in the oil price is likely to affect the market. We expect the majority of new activity to be focused on occupiers restructuring their leases rather than on new transactions.”
Despite the disruption caused, CBRE is continuing to work with clients to market their assets, using the latest technology to carry out virtual viewings.
Amy Tyler continued: “For the duration of the lockdown period, we are able to offer clients use of our in-house visualisation tool, Floored Plans. This allows us to showcase a space using interactive 2D and immersive 3D views, with the possibility to alter the layout during virtual tours with instant results. We can take requirements such as headcount, open space and actual useable square footage into consideration to help potential occupiers with the decision-making process. This technology is a great way to ensure prospective tenants are still looking at our clients’ properties and we will continue to offer it to clients free of charge until physical tours become possible again.”
CBRE was involved in nearly a third of all Aberdeen office deals during the first quarter, amounting to 46,500 sq ft of space transacted – 27% of the total Q1 take-up.