‘Cautious optimism’ for Aberdeen market after positive 2022

THE recovery of the energy sector helped office take-up in Aberdeen increase by 96% last year, new research has revealed.

Knight Frank said office take-up in the city reached 385,583 sq ft during 2022, after 81,231 sq ft of space was transacted in the final quarter of the year.

The figures were boosted by Shell taking more than 100,000 sq ft at The Silver Fin Building in the first quarter. 73% of the total space transacted involved energy and supply chain companies.

A ‘significant’ amount of the remaining space was taken by companies that advise the energy industry, including law firm Gilson Gray.

With several deals carrying over into 2023, Knight Frank said there was ‘cautious optimism’ going into the first quarter of the new year.

Matthew Park, partner at Knight Frank Aberdeen, said, “Last year was much more positive for the city’s commercial property market, following two years of pandemic-related disruption. We expected take-up to reach 400,000 sq ft, but some of the deals have taken slightly longer to get over the line and should conclude in the first quarter of 2023.

“With the UK Government offering the potential of more than 100 new awards in the last North Sea licensing round, there are reasons to be cautiously optimistic for the year ahead. We are hopeful that provided the oil price stays high – above $80 per barrel – there will be continued demand for high quality office space across the market.

“However, the Windfall Tax and the SNP-Greens’ recent announcement on their intention to wind down North Sea oil and gas activity are becoming factors in many energy companies’ investment plans for the years ahead. In turn, they could begin to have an impact on the city’s property market.”