London-based property investor Faro Capital has unveiled plans for a new business park in Aberdeen.
A first phase of the project would deliver the speculative development of 16 small business units ranging from 1,496sq ft up to 9,494sq ft.
Proposals for a second phase are focused on new “build-to-suit” opportunities in an area covering 3.8 acres.
The business park – to be called Altens Gate – is planned for the former site of Trafalgar House 1 and 2 – former offices of engineering and consultancy services giant Wood and energy firm Nexen, which is now part of Chinese-owned CNOOC International.
Faro, whose other Granite City properties include Quattro House, on Wellington Circle and buildings at Aberdeen Innovation Park, acquired the 5.9-acre site earmarked for Altens Gate for £4 million in 2017.
Efforts to relet or resell the 95,661sq ft of office accommodation that had lain vacant since Wood and Nexen moved out proved fruitless, despite substantial renovation work.
Neal Harvey, vice-president of investments at Faro, said: “After four years of no success Faro identified the opportunity to redevelop the site into a business park of units of various sizes – Altens Gate.”
He added the opportunity to create a “contemporary” new home for businesses in the heart of oil and gas, renewable energy and automotive trading areas, accessed directly from Hareness Road and close to the new South Harbour, was a key factor in the company’s decision to redevelop the “gateway” to Altens Industrial Estate.
Commercial property giant CBRE will market the new business park, which still needs planning consent, on behalf of Faro.
Amy Tyler, senior surveyor in the Aberdeen office of CBRE, said: “It is positive to see continued investment in the Aberdeen industrial market.
“The site will be further enhanced with the opening of the new harbour later in the year which will give Altens a boost.”
Ms Tyler added: “Altens Industrial Estate remains one of the premier industrial locations in the city and over the past five years has accounted for over a fifth of industrial transactions in the market.
“With the emergence of new business parks at Kingswells and Westhill there has been a transition, with a number of notable office occupiers leaving Altens.
“The upside to this is that it has created opportunities for developers to repurpose sites, and those like Altens Gate are better served as industrial locations.”
Site clearance is expected to reach completion around the end of this month.
Mr Harvey said this, together with planning permission, would pave the way for redevelopment work to be “up and running this side of Christmas”.
There is “reasonable demand” across the UK for modern new business units of the size proposed but Aberdeen has only a limited supply, compared with a glut of old stock, he added.
As well as their proximity to the new South Harbour, the contemporary new units in a “cleaner type of environment” at Altens Gate – close to Wood’s modern new headquarters – could be particularly appealing as potential back-up workshops for car dealerships on the south side of Aberdeen, he said.
Nearly 721,000sq ft of industrial space was transacted in Aberdeen last year, compared with a five-year average of 652,579sq ft, despite brutal economic conditions.
Reporting the 2020 total earlier this year, CBRE said the city’s industrial sector had held up surprisingly well and “remains spirited”.
Meanwhile, demand for office space has been subdued during the pandemic.
In February it emerged that Faro was looking to demolish part of Quattro House to make way for new flats. Similar proposals had previously been put forward for Atholl House and Alba Gate.