Aberdeen office market moves closer to full 2021 takeover in just three months

Office take-up in Aberdeen nearly reached the full figure for 2021 in the first three months of this year alone, according to analysis by Knight Frank.

The commercial real estate consultancy found that 195,905 square feet of office space was traded between January and March 2022, compared to around 197,194 square feet last year.

So far, demand in 2022 has been supported by Shell’s 100,000 square foot lease at the Silver Fin Building, which ended in January.

The North Sea Transition Authority – formerly the Oil and Gas Authority – also took about 18,000 square feet at 1 Marischal Square in the first quarter, while energy services company Ponticelli got 17 900 square feet at Abercrombie Court in Westhill.

Earlier this year, Knight Frank said cautious optimism was returning to the Aberdeen office market, buoyed by rising oil prices and more workers returning to the office.

Matt Park, Partner at Knight Frank Aberdeen, said: “Notwithstanding the uncertain wider economic picture, this has been a positive start to 2022 for the Aberdeen office market.

“At the beginning of the year, we expected to exceed 200,000 square feet of take-up by the end of June, but we are very close to reaching this figure in just three months.

“The ongoing conflict in Ukraine, inflation at a 30-year high and rising interest rates will no doubt influence progress for the rest of the year, but there are still reasons for optimism: more and more occupiers in Aberdeen are looking for space and generally speaking their needs seem greater.

“There’s also a good level of activity for smaller needs,” he continued, adding, “These businesses are generally looking for flexible spaces and landlords who will work with them to provide a space that suits their needs. .

“All things being equal, we expect more businesses to be evaluating their options in the remainder of 2022, with a significant amount of inventory available to them in the city.”

Elsewhere, JLL’s initial Scotland first quarter office market statistics revealed that the number of transactions of 5,000sqft and above in Edinburgh and Glasgow increased compared to the same quarter before Covid.

In the capital, there were more transactions of 5,000 square feet or more compared to the same quarter in 2019.

There was also an increase in the number of occupiers looking for space in the first three months of this year, compared to the same period in 2019, with professional services and technology, media and telecommunications being the most active sectors at the start of the year.

In Glasgow, there were more transactions of 5,000 square feet and above compared to the same quarter before Covid and compared to the same quarter in 2021. In addition, take-up in the city center increased by almost 21 000 square feet, compared to the first quarter numbers from 2021 and the city market is also expected to show strong performance in the second quarter.

Glasgow saw nearly 82,000 square feet of take-up this quarter.

Craig Watson, director of JLL in Edinburgh, said: “It is clear from our first quarter research that the number of office needs in Edinburgh has returned to pre-pandemic levels – this pent-up demand is not yet evident in transactional activity.

“Many occupiers are hesitant as restrictions are lifted, waiting for their analysis on the ‘back to office’ movement to continue – this has no doubt delayed decisions and reduced transactions for this quarter.”

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Jose C. Birney