New research by global commercial property adviser CBRE has revealed a positive end to 2020 for the Aberdeen office market.
Take-up in the final quarter totalled 155,926sq ft – down by 34% on the same period in 2019, before the Covid-19 pandemic, but up by 26% on the five-year average of 123,307sq ft for Q4.
The total take-up of office space in and around Aberdeen in 2020 was 424,797sq ft.
Second best year since 2014
Although this is again down from 2019’s total of 505,710sq ft, it is 11.3% above the five-year average and represents Aberdeen’s second-best year for office occupational take-up since the 2014 oil price plunge.
In addition, a further 186,000sq ft of office buildings in and around Aberdeen were sold to developers for redevelopment, or property investors for refurbishment and re-letting.
Like all markets, Covid-19 had an impact on both the volume and size of deals during 2020.
Only 53 deals completed last year, compared with 84 in 2019. But with eight deals topping the 10,000sq ft mark, industry experts say the Granite City remains an attractive place of business for larger occupiers.
The biggest deal of the year was at Aberdeen International Business Park (AIBP), in Dyce, with BP committing to a 102,000sq ft new North Sea headquarters, a transaction in which CBRE advised the occupier.
Other highlights included Stork’s 55,000sq ft acquisition of The Quad in Dyce, Equinor acquiring an additional 15,000sq ft at Prime Four, Kingswells, and C7 Health purchasing a 19,200sq ft office on Wellheads Crescent, Dyce.
Supply up year-on-year
Overall office supply currently sits at 2.6 million sq ft, an increase of 7.61% on a year ago.
New Grade A space in Aberdeen remains at a premium, however, with only 259,524sq ft currently available to the market.
Derren McRae, head of office at CBRE Aberdeen, said: “Whilst we’ve endured a challenging year, the city’s healthy final office take-up figure paints an encouraging sign.
“A city that is all too familiar with economic disruption, it’s perhaps Aberdeen’s famous resolve and resilience that explains how we’ve managed to successfully navigate both a global pandemic and oil price fluctuations, delivering some positive end-of-year figures in the process.
“Despite market challenges it is encouraging to see there are some fairly significant office requirements being circulated.
“It will certainly be interesting to see how office requirements evolve as companies look to incorporate more flexibility for the working location of staff into their real estate strategy, with many likely to favour a blended approach to enable a mix of office and home working.”
BP, which has been on its current site on Wellheads Avenue since 2008, is downsizing to more modest premises at AIBP.
Announcing the move late last year, the energy giant said it wanted to create “a modern workspace befitting our continued commitment to the region”.
The company expects to complete its relocation towards the end of 2021, paving the way for a major refurbishment of its current premises by owner LaSalle Investment Management.