THE availability of prime office space in Aberdeen is understood to have fallen to a record low after a major deal involving one of the North Sea’s biggest oil and gas producers.

Harbour Energy, which has interests in some of the biggest assets on the UK Continental Shelf, has agreed to lease a 34,000 square feet space at Prime Four Business Park in Kingswells.

Property agent Knight Frank, which brokered the deal, said the commitment by Harbour reflects the current fortunes of the North Sea, noting that Brent crude has been trading at more than $70 per barrel for the last two years. The North Sea has been revitalised in the wake of Russia’s invasion of Ukraine in February 2022, which led to a spike in gas prices and the UK to place renewed focus on boosting domestic energy supplies.

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The Harbour deal comes after fellow major Shell relocated to a 100,000 sq ft prime office space at the Silver Fin Building on Aberdeen’s Union Street and BP extended its lease for its 192,000 sq ft premises at Stoneywood in the city last year.

Knight Frank said the demand for high-quality offices reflects demand from companies in the energy sector and a more general appetite from businesses looking for premium spaces, a trend which began in the wake of the pandemic.

The agent declared there are now signs that it is proving more difficult for occupiers to secure the  property they need in Aberdeen, suggesting the gap between supply and demand is closing in the city. The availability of Grade A space has dropped to under 2%, the lowest on record in the city.

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Eric Shearer, head of office at Knight Frank Aberdeen, said: “The health of the Aberdeen commercial property market is still fundamentally tied to the price of Brent crude, which has thankfully been trending at more than $70 per barrel for the last two years.

“This is driving strong occupier demand for commercial real estate and a significant increase in deal flow since the lows of the pandemic and that is making it more competitive for occupiers that want to secure the best space. Planning ahead will be more important than it has been for some time.”

Matt Park, partner at Knight Frank Aberdeen, noted: “The emphasis on prioritising high-quality space, which has been evident since the beginning of the Covid-19 pandemic, remains a noteworthy trend. Occupiers are placing a growing importance on the highest quality buildings in their decision-making process and, as a consequence, Grade A availability has dropped to a record low.”