Half-year figures from international property specialist Savills reveal a huge jump in office space take-up in and around Aberdeen.
According to Savills, take-up during the first six months of 2017 reached about 270,000sq ft – an increase of about 17% on the total for the whole of 2016.
Aberdeen’s office market has endured a dire few years following the slump in oil prices and its impact on the local economy.
Key deals in and around the city during the first half of 2017 included Marathon Oil taking 31,668sq ft from Kennedy Wilson at the Hill of Rubislaw, Total’s 108,000sq ft assignation from Subsea 7 at Arnhall Business Park, Westhill, and local legal firm Stronachs’ lease of 13,683sq ft at 28 Albyn Place.
Savills’ total might have been even more impressive had it included the 48,000sq ft letting at the Capitol in Union Street to North Sea newcomer Chrysaor.
The oil firm announced in May it had agreed terms to become the third and biggest tenant in The Capitol.
Savills advised the Capitol’s joint-venture partners, Knight Property Group and M&G Real Estate in the deal, but it said it did not include it because Chrysaor was still waiting for Oil and Gas Authority approval after agreeing to buy a package of assets from Shell.
Dan Smith, director in the property firm’s Granite City office, said: “The improvement in market sentiment and deal activity we reported at the end of the first quarter in Aberdeen continues as the city sees increased churn from both new and existing occupiers.
“This is largely a result of lease events, improving energy sector demand and increased flexibility relative to lease terms.”
Savills said it expected the strong level of leasing activity to continue as occupiers look to relocate to better quality office accommodation in the city centre.
That view is reinforced by two major city centre projects nearing completion.
The Titan and BA Pension Funds-owned Silver Fin building (135,000sq ft) next to the Capitol and Muse/Aviva’s Marischal Square (175,000sq ft) development are both due for completion this month.