A property investor may clinch the biggest deal of the year in Aberdeen so far after putting a landmark property up for sale amid the upturn in the market fuelled by the surge in oil and gas prices.
APAM has put Talisman House on the market for £19.5 million in a move that advisers to the firm at Knight Frank said provided a further sign of the recovery in Aberdeen’s commercial property market.
The six storey building is fully let to the Repsol Sinopec oil and gas business, which is owned by Chinese and Spanish investors.
Activity slumped in Aberdeen last year after the fallout from the pandemic took a heavy toll on the oil and gas industry, which is a mainstay of the local economy.
However, oil and gas prices have risen strongly in response to the easing of lockdown measures around the world in recent months.
READ MORE: Edinburgh oil firm buys into Norrth Sea exploration prospects
“A higher, and more sustained, oil price has helped lift Aberdeen’s commercial property market, with increased deal activity and renewed activity from occupiers,” said Douglas Binnie at Knight Frank.
An analysis by the property consultancy found that take-up doubled between the second and third quarters of this year.
While campaigners want curbs to be imposed on North Sea activity in response to concerns about climate change, Knight Frank appears confident that the recovery in the Aberdeen market will be sustained.
“All things being equal, we expect to see increased investor appetite for the city as we move into 2022, with the occupier market continuing to recover and, with that, investment activity picking up,” said Mr Binnie.
A range of oil and gas firms have unveiled plans to invest heavily in windfarms in the North Sea and related energy transition technologies, such as hydrogen fuel production and carbon capture and storage.
READ MORE: Orkney oil terminal to be transformed into hydrogen production complex
Repsol Sinopec recently announced plans to develop a large-scale green hydrogen facility on Orkney.
A buyer who paid the £19.5m asking price for Talisman House would enjoy an initial yield of around 12 per cent based on the current rental income. Mr Binnie said: “While the asset offers a high yield, it is also a high-quality property in a good location in the city.”
The six storey Talisman House was built in 2000. It was originally occupied by Canada’s Talisman Energy. Sinopec and Repsol acquired stakes in Talisman in separate deals in 2012 an 2015.
It is thought the biggest commercial property deal in Aberdeen so far this year was the sale of Neptune Energy’s headquarters in May to London-based Glade Capital. The property was marketed for £15.25m.APAM bought Talisman House in 2010 for an undisclosed amount.
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