New bypass to drive Aberdeen commercial property market

Marischal Square, Aberdeen
Marischal Square, Aberdeen

The new bypass and other projects in Aberdeen are expected to strengthen office market activity in and near the city this year.

Derren McRae, managing director of CBRE in Aberdeen said there was a “renewed vibrancy” which potential movers found appealing.

He was speaking after new figures from CBRE Scotland revealed a fall in total office take-up in and around Europe’s oil and gas capital last year, to 355,148sq ft.

The 405,000sq ft total for 2017 was boosted by the letting of 138,000sq ft at Subsea 7’s building in Westhill to French energy giant Total.

In 2018, the biggest deal was serviced office provider Spaces signing up for 26,300sq ft in 1MSq at Marischal Square.

Other lettings at Marischal Square included 9,975sq ft for the NHS and 8,452sq ft for oil and gas supply firm Tenaris.

Noble Drilling took 16,591sq ft of speculative office space at ABZ Business Park and Ineos signed up for 9,702sq ft at Prime Four at Kingswells.

Mr McRae said: “From a commercial property perspective, there has been a generally more upbeat feel to the Aberdeen market in 2018.

“We have continued to see letting activity take place in the best quality office buildings, such as Marischal Square and the Silver Fin building.

“Encouragingly take-up has generally been dominated by energy sector companies taking the opportunity to move to better-quality buildings in more desirable locations.”

He added: “Looking ahead to 2019, a number of factors are expected to strengthen letting activity.

“The long-awaited opening of the new ring road, the Aberdeen Western Peripheral Route (AWPR), offers improved accessibility to out-of-town locations.

“We expect to see an increase in letting activity as a consequence of completion of AWPR.

“Additionally, a joint venture between Codebase and Opportunity North East to create Aberdeen’s first digital hub will add a new tech dynamic to the city centre when it opens in 2019.

“Combined with the recent opening of the Sandman Signature Hotel, the imminent completion of residential development The Point and refurbishment of Aberdeen Art Gallery, we are of the view this renewed vibrancy in the city centre will appeal to office occupiers.

“With the premium floors of new Grade A developments letting up, we also anticipate occupiers with lease events in 2020 and 2021 looking to expedite relocations to ensure they secure the best remaining space.”