Aberdeen has received a timely boost after confidence was shaken by the news that BP has put its North Sea business up for sale, signalling the end of its long association with the area.
New research has found that the Granite City recorded its strongest quarter for office take-up since before the coronavirus pandemic, driven by the relocation of CB&I Asset Solutions to Kingswells and a flurry of other deals concluded between April and June.
It is a welcome fillip for the city amid the ongoing fall-out from BP’s decision to exit the North Sea, a move which has sparked uncertainty over the future of the 1,100 jobs the energy giant provides in Aberdeen and more generally the oil and gas industry in the area.
BP has been a major player in the North Sea for 60 years. Its decision to sell up has been linked by Aberdeen & Grampian Chamber of Commerce and other critics to the UK Government’s energy profits levy, stating that the policy is turning investors away and increasing the UK's reliance on more expensive imports of gas.
However, analysis released today by property firm Knight Frank suggests that firms have had the confidence to take decisions over office requirements in the city which had been put on hold. This includes three moves by energy companies in Aberdeen, which accounted for more than 80% of office take-up in the city over the period.
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Knight Frank said the figures offer a “highly encouraging sign after a prolonged period of subdued activity”.
The agent found that deals spanning 221,213 square feet of office space in the city were concluded in the second quarter. The tally was more than three times the 68,482 sq ft recorded in the first three months of the year, and more than double the 102,412 sq ft of space transacted at the same stage last year.
Knight Frank was involved in more than two-thirds of the space transacted in the second quarter, which it said was the highest quarterly take-up since the final three months of 2019. That was before the pandemic struck and the shift to working from home fundamentally altered demand for office space.
“The last quarter’s office take-up in Aberdeen is a highly encouraging sign after a prolonged period of subdued activity – boosted by CB&I Asset Solutions taking more than 100,000 sq ft at Prime Four Business Park,” said Matt Park, partner at Knight Frank Aberdeen.
“We were delighted to represent the company on this transaction, which was one of the biggest of the past decade.
“More widely, some of the decisions businesses had been holding back are now starting to move again, whether that’s upgrading space or consolidating into more suitable accommodation – reflected by the fact we have seen three energy companies recently relocate their headquarters.
“Occupiers continue to favour office space that is ready for immediate occupation. Demand is being driven by a preference for simplicity, cost certainty, and faster move-in times, with many businesses choosing to avoid the expense, disruption, and lead time associated with managing their own fit-out projects.
“As a result, high-quality, fully fitted, and well-presented space remains particularly attractive across the Aberdeen office market.
“With a number of requirements on the market, we expect to see the positive momentum from the second quarter continue into the remainder of the year. That could also mean we see a new headline rent set in Aberdeen during the second half of 2026, as occupiers compete for the best available space.”
Knight Frank noted that the largest transaction in the second quarter saw CB&I Asset Solutions take more than 100,000 sq ft at Caledonia House at Prime Four Business Park in Kingswells. It was the largest office transaction since Total’s relocation to Westhill in 2017. Knight Frank represented CB&I Asset Solutions on the transaction.
In total, 14 deals were concluded between April and June, eight of which involved energy businesses and the remainder comprising technology, professional services, and charity occupiers. The energy sector accounted for 83% of the quarter’s take-up, with three large companies in the industry relocating their headquarters during the period.
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