Aberdeen take-up up by almost 150% from second quarter
Leading real estate advisor CBRE has released its latest figures on the office market in Aberdeen during the third quarter of the year.
Stewart Taylor, head of CBRE’s Scottish office agency business, commented: “The offices sector, along with every other sector, continues to be significantly impacted by the lockdowns triggered by the COVID-19 pandemic. However, activity has increased with some substantial transactions taking place. Comments forecasting the death of the office are misplaced: a greater prevalence of flexible working does not translate into occupiers taking less office space, but different space, as the need to exchange ideas, collaborate and innovate outweighs short term concerns. There is an industry-wise acknowledgment, supported by research, that despite ongoing restrictions the physical office is here to stay, as businesses plan to adopt hybrid work practices.”
In the third quarter of 2020, office take-up in Aberdeen totalled 81,723 sq ft, a drop of 33% from the same period in 2019 but up almost 150% from the previous quarter. This brings the total take-up for the year to 268,871 sq ft, which is encouragingly still marginally up on the same period in 2019.
The area of Dyce secured four of the largest transactions in the quarter with TAC Healthcare purchasing Wood’s former 19,233 sq ft office on Wellheads Crescent, energy services company Expro acquiring the 16,212 sq ft Kirkhill House and drilling waste specialist TWMA and subsea contractor Ocean Installer taking 8,030 and 7,233 sq ft respectively at Aberdeen International Business Park.
The largest in town letting was artificial intelligence company Arria taking 9,863 sq ft at Carden Church in the west end of the city.
Supply in the city currently sits at 2,678,000 sq ft, a 4.65% rise from the same period in 2019. Out of this supply figure, only 545,200 sq of it constitutes as modern office space; just over 20% of the office space currently available in the Granite City.
Commenting, Derren McRae, managing director of CBRE’s Aberdeen office, said: “As we are seeing across various markets, the climate continues to be challenging, however we have seen a significant increase in activity in the third quarter of the year with some key transactions taking place.
“Commercial terms for the majority of the Q3 transactions were agreed prior to COVID-19 so it is a positive reflection of the market that these deals did indeed follow through to completion, albeit in some cases occupiers looked to either slightly reduce their office footprint or negotiate additional flexibility on lease term.
“Dyce has witnessed a transformation in recent years and the four office acquisitions demonstrate occupiers’ ever improving perception of the area. It was also pleasing to see Carden Church being acquired by Arria which will relocate from the north of the city to one of the highest profile office buildings in the West End.”