Rising activity

Oil price drives demand for offices in Aberdeen

D 2 Business park
The D2 Business Park in Aberdeen has proved popular

Rising offshore activity, driven by soaring oil and gas prices, is pushing up demand for office lettings in Aberdeen.

Property agent Knight Frank expects to see transactions double this year as the city recovers rapidly from the pandemic slump.

Deals involving 304,352 sq ft have taken place in the city in the first nine months of the year and Knight Frank expects the figure to exceed 400,000 sq ft by the end of 2022. That compares with 197,000 sq ft of deals in 2021.

The largest deal in the third quarter of 2022 was Dolphin Drilling securing 9,000 sq. ft. of office space at D2 Business Park in Dyce.

Knight Frank said the high price of oil had boosted offshore activity and as a result of that the demand for office space from companies involved in the energy sector had grown.

Matthew Park, partner at Knight Frank Aberdeen, is optimistic for further lettings during the rest of the year. He said: “Office activity so far in 2022 demonstrates that Aberdeen is bouncing back from the effects of the Covid-19 pandemic.

“There are enough transactions in the pipeline to believe that we can surpass 400,000 sq. ft. for the year, which would be more than double 2021’s total.

“The sustained high oil price at around $100 per barrel and the prospect of more than 100 new North Sea licenses being awarded, to boost domestic oil and gas production, in the next licensing round is trickling through into property deals, with more oil services and drilling companies issuing contract-led requirements. All things being equal, we would expect that to continue in the final quarter and into 2023.”

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