NEW research has revealed take-up of industrial property in Aberdeen reached its highest level in almost a decade last year.
Knight Frank said the high oil price and greater interest in renewables boosted activity in the energy sector and its supply chain.
The commercial property consultancy’s analysis found that Aberdeen saw 926,140 sq. ft. of take-up across 95 deals during 2022 – up 42% on the previous 12 months. The figure was also the highest since 2014’s 1.33 million sq. ft.
The largest letting was in Portlethen, with a waste company taking 67,000 sq. ft. of industrial space.
The industrial sector’s performance mirrors improved activity levels recorded in Aberdeen’s office market. Last month, Knight Frank reported office take-up had increased 95% between 2021 and 2022, with energy companies accounting for around three-quarters of activity.
Scott Hogan, head of Scotland industrial and logistics at Knight Frank, said, “Last year’s take-up figures show demand for industrial property surged in Aberdeen during 2022 – albeit, this was boosted by a number of larger deals. Part of the rise in demand can be attributed to improving sentiment from within the energy sector and a sustained high oil price.
“There is still plenty of demand for industrial accommodation in the city, but the lack of good quality available space means that there is a high level of competition for the right property – especially at the larger end of the market. This was somewhat reflected in the higher than average number of lease renewals taking place.
“These dynamics also helped push up the average lease length last year and prime rents continue to hold up. However, continued high build costs mean market conditions are still not right for speculative development.
“All things being equal, there are a healthy number of deals in the pipeline, along with strong enquiry levels, which should sustain the market into 2023. Growing interest from renewable energy companies will also add to the bedrock of the oil and gas sector as the staple of property deals in Aberdeen.”