Surging oil price boosts office lettings in Aberdeen
Higher oil prices are helping sustain a surge in demand for office space in Aberdeen, according to new analysis.
Commercial property consultancy Knight Frank said 141,789 sqft of office space was taken up in the third quarter – already ahead of the 116,642 sqft leased during the first half of the year.
The market is also faring well compared to 2022, with figures for July to September sitting up by almost 200% on the same period last year.
The majority of the deals agreed in the last quarter involved companies in the energy and utilities market, with their commitment to the city underpinned by the sustained higher oil price.
Well services company, Odfjell Technology, took 19,164 sqft. at Prime Four business park, while energy infrastructure specialist Kellas Midstream leased 10,149 sqft at The Capitol on Union Street.
The city’s west end continues to be a favourable location and has so far seen the most activity in 2023, with 43% of office deals involving west end properties.
Knight Frank said the area’s popularity was due in part to a range of recent refurbishment and investment initiatives, bringing traditional listed buildings in line with modern occupiers’ requirements. New features include revamped common areas as well as improved energy efficiency measures.
Matthew Park, partner at Knight Frank Aberdeen, said: “It is encouraging to see an uptick in office activity following on from a reasonably quiet start to the year. With a flurry of deals completed this quarter, we are cautiously optimistic that the market is back on track for a strong end to 2023.
“The sustained high oil price is undoubtedly giving the city a boost, with more companies committing to high-quality office space across Aberdeen.
“The flight to quality remains high on the agenda for any businesses considering new space and it is great to see the results of landlords’ hard work and investment in the west end beginning to attract new occupiers.”