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Aberdeen property deals defy dip in oil activity

EnquestEnQuest, the largest UK independent producer of oil in the UK North Sea, has sold its new headquarters to a property investment company.

It has taken up occupancy of Annan House and sold it to Rockspring Hanover (Aberdeen) Property Unit Trust for £45.1 million, representing a net yield of 6.35%.

EnQuest has taken a twenty year lease over the 120,000 sq ft building in the heart of the North Dee Business Quarter.

The net proceeds to EnQuest is £12.6m which will be used for general corporate purposes. 

Property consultant CBRE represented Rockspring and said this deal, along with the sale of a 70,000 sq ft building under construction at the City South Business Park on behalf of Dandara, demonstrated ongoing activity in the commercial property investment market despite the recent dip in the oil and gas industry.

The building, due for completion next year, has been pre-let to KCA Deutag Drilling Ltd for a 20 year period. The purchase price of the HQ was £23.5m, reflecting an initial net yield of 6.03% and was sold to a private investor.

Gordon Pirie, director of CBRE in Aberdeen, said: “Completion of these significant transactions shows that despite recent turbulence in the oil and gas industries, the commercial property investment market remains active where good quality product let on long leases to strong covenants is available.

“One positive aspect of the Aberdeen market in recent times is that some of the mainstream institutions that have purchased in Aberdeen in the past three to four years have been less active but this has opened up opportunities for other buyers who had recently found it difficult to secure representation in the city.

“These transactions show that Aberdeen is still very much on the radar of investors.  Aberdeen is still one of the few places in the UK where you can achieve long term income secured by good quality tenants, with guaranteed income growth performance at competitive pricing in comparison to the rest of the UK regional market.

“There are also positive messages for the occupational sector with the conclusion of the Enquest and KCA Deutag deals offering evidence of international oil and gas companies seeking to maximise the efficiency of their real estate. Their commitment to long term leases further cements the reputation of Aberdeen as a global energy hub.”

Knight Frank represented EnQuest; CBRE & FG Burnett advised Dandara.

 

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