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he annual market activity report issued today (March 8 2018) by leading global property firm Knight Frank indicates that the Aberdeen and north east economy has cause for guarded optimism with improving prospects in the commercial property sector.

With the worst of the downturn now past and most rationalisation programs seemingly complete, occupier activity showed steady improvement in 2017. Oil is the city’s main growth driver, and in early March, Brent crude was trading at around the US$64.00 a barrel mark up by 16% on a year earlier. Price stability would offer certainty to oil firms operating in Aberdeen, and allow them to plan for the future. This improves the chances that companies with upcoming lease expiries might initiate searches for new office space.

Office take-up reached 468,000 sq.ft by year end, a total that, although 18% below the 10-year annual average, reflects a 68% increase when compared to 2016. The reported rise was underpinned by three large deals. The largest of which saw 138,500 sq. ft. taken by oil firm Total at


West Campus, Westhill. The second largest letting saw Somebody Cares relocate John Wood House in Aberdeen. In May, independent oil and gas company Chrysaor took over 47,700 sq.ft at The Capitol on Union Street for its North Sea headquarters. Many occupiers took advantage of “the tenant friendly” market conditions throughout 2017 to re-negotiate the terms of their existing lease with their landlords (nervous about potential long void periods and large empty rates bills) on more favourable terms in return for extending or renewing their lease duration. In terms of supply, levels have remained at over 2.5 million sq.ft over the course of the year with no signs of this figure reducing significantly in the short term. City Centre offices continue to dominate supply, accounting for 43% of the market allocation. Marischal Square was the last of the new developments to reach practical completion in December 2017. Other prime city locations, such as The Capitol building at its next door neighbour Silver Fin are also performing well. The bulk of the Grade ‘C’ space (over 558,000 sq.ft) is no longer “fit for purpose”


hepherd Chartered Surveyors is offering an industrial facility in Aberdeen for lease or sale. Located on Howe Moss Drive, in the heart of Kirkhill Industrial Estate, one of Aberdeen’s prime industrial estates, the 10,030sq.ft property is seven miles north west of Aberdeen city centre and in close proximity to the A96 and the AWPR. The detached industrial unit has been laid out to provide workshop and office accommodation, with the office space over ground and first floor at the front and the industrial space to the rear. The accommodation includes a 5660 sq.ft yard. James Morrison, associate – commercial agency at Shepherd in Aberdeen, said: “The accommodation offers office space across two floors, with the ground floor providing cellular offices together with toilets, a shower room and a communal kitchen while the first-floor offers high quality cellular offices with a boardroom off an executive kitchen.”


hepherd Chartered Surveyors is offering a retail unit in a popular location in Aberdeen to let. The unit is situated within the main retailing section of Rosemount Place, which benefits from close proximity to Aberdeen city centre and its associated amenities. On street car parking is available within the immediate area. The ground and lower ground floor 610 sq.ft retail unit is split into an office/retailing sales area to the front with the rear section providing further office/retail space. At lower ground floor level, the unit is split to provide a breakout area, tea prep and additionally W.C. facilities.


Adam Honeyman at Shepherd in Aberdeen, said: “The Rosemount area of Aberdeen forms an established retailing location, a short distance north west of the city centre. As such, we anticipate keen interest in this retail unit, particularly as 100% rates relief may be available to qualifying tenants.”


and should be considered for re- development or alternative use. In 2017, prime headline rents held firm at £32.00 per sq.ft, albeit occupier incentives remain particularly attractive. Rental values are expected to come under pressure in 2018 driven by a continued supply and demand imbalance. The investment market also saw signs of improvement, with office investment volumes for the year at £98.8m, the highest total achieved since 2014. The Aberdeen market did witness an increase of 419% when compared to the cycle low of 2016, largely propped up by two significant sales: Total’s occupancy of West Campus at Westhill; and the 105,594 sq.ft office let to Lloyds Register by developer Drum Property Group at Prime Four Business Park. Knight Frank Aberdeen partner Eric

Shearer said: “Sentiment in the industry is cautiously optimistic, however despite the oil price reaching a high of $67 per barrel at the close of December 2017, there will inevitably be a significant time lag before we witness a tangible improvement in the occupational market.”


n industrial unit within a popular industrial location close to Aberdeen international airport to let is being offered by Shepherd Chartered Surveyors. The 12,070 sq.ft property is situated on the north side of Walton Road within the heart of Kirkhill Industrial Estate, a popular industrial location lying within the suburb of Dyce, six miles north of Aberdeen city centre. The accommodation comprises a detached workshop building with associated two storey offices along with a yard and car parking. The space provides large open plan offices together with numerous private and meeting areas along with a server room, tea preparation area and male and female WCs. James Morrison, associate – commercial agency at Shepherd in Aberdeen, said: “Kirkhill Industrial Estate has developed considerably and is now a popular location for many national and international oil and gas related companies within the city.


hepherd Chartered Surveyors is offering industrial units at Denmore Industrial Estate, Bridge of Don, Aberdeen to let. Located three miles north of Aberdeen city centre, Denmore Industrial Estate is a popular business location which benefits from rapid access onto the A90 trunk road and main arterial routes serving the city. It is also close to the AWPR. The end and mid-terraced industrial units, situated within a

terrace of five industrial units, have been laid out to provide warehouse and office accommodation with unit 21 and 23 benefiting from additional first floor office accommodation. Units 21-22 offer a total of 11,120 sq.ft of space while Unit 23 offers 5,080 sq.ft. James Morrison of Shepherd in Aberdeen, said: “Given the popularity of this business location and its proximity to the transport network, we anticipate keen interest in this opportunity.”


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