Council leaders in Aberdeen yesterday faced fresh questions over the Marischal Square project after a major developer ditched a city centre office scheme due to a lack of demand.
The Press and Journal revealed yesterday that Dandara was revising its £20million plans for the Triple Kirks site due to “market cycles”.
The company has tabled a proposal of application notice to build student flats instead.
Property experts in the city say that supply of commercial office space is exceeding demand with several new developments either completed or in progress in the city centre.
Aberdeen’s Labour-led administration has been criticised for pushing ahead with the £107million hotel, office and retail plans for Broad Street, despite doubts as to whether the 173,000 sq ft of office space will be let. The local authority will have to cover any losses if tenants are not found, and could face a bill running to millions of pounds.
Callum McCaig, opposition SNP group leader, said: “This must be causing alarm bells to ring in the council’s finance and property departments when a major developer at an advance stage of their plans has sought to scrap proposals for an office development at a time when we are planning on building something much larger which will come to the market much later.
“It suggests that we will have major problems filling this and just underlines the folly of signing this deal in the first place.”
But Willie Young, finance convener at the council, insisted that the position would not change. Councillors narrowly voted by 22-21 to progress with the plans earlier this month.
Mr Young said: “First of all, on three occasions, the SNP has put their position forward on this issue and council has rejected it each and every time.
“We remain confident that we will get the office space rented and, indeed, one of the things we will be doing as part of the City Deal discussions is speaking to the UK and Scottish Governments to ask if there can be more civil servants up in Aberdeen.
“At the moment, they are almost all based in Glasgow and Edinburgh, we have wonderful premises being built here waiting to be occupied, and you can’t get a better tenant than the government.”