By Scott Wright
THE take-up of office space in Aberdeen nearly doubled last year, boosted by higher oil prices, new figures show.
The commitment by oil and gas giant Shell to a 100,00 square foot space at The Silver Fin Building was a major contributor as take up reached 385,583 sq ft in the city, up 96 per cent on 2021, analysis from property firm Knight Frank found.
Around 280,000 sq ft, or 73 per cent of the total, was taken up by companies involved in the energy sector and its supply chain.
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The activity came amid renewed interest in the North Sea, as steps were taken to boost domestic energy production and reduce the UK’s reliance on imports after prices surged in the wake of Russia’s invasion of Ukraine.
A significant number of the transactions seen in Aberdeen involved professional services firms providing advice to the industry. Law firm Gilson Gray agreed to lease 4,500 sq ft at Blenheim Gate.
Knight Frank said there had been a notable upsurge towards the end of the year, with 81,231 sq ft of space taken up in the final quarter. With several deals carrying over into 2023, it said there was “cautious optimism” over prospects for the first quarter of the year.
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Matthew Park, partner at Knight Frank in Aberdeen, said: “Last year was much more positive for the city’s commercial property market, following two years of pandemic-related disruption.
“We expected take-up to reach 400,000 sq ft, but some of the deals have taken slightly longer to get over the line and should conclude in the first quarter of 2023.
“With the UK Government offering the potential of more than 100 new awards in the last North Sea licensing round, there are reasons to be cautiously optimistic for the year ahead.
“We are hopeful that provided the oil price stays high – above $80 per barrel – there will be continued demand for high-quality office space across the market.
“However, the windfall tax and the SNP-Greens’ recent announcement on their intention to wind down North Sea oil and gas activity are becoming factors in many energy companies’ investment plans for the years ahead. In turn, they could begin to have an impact on the city’s property market.”
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