Aberdeen Commercial Property Market
The market trend of “cautious optimism” in 2018 is set to continue this year against the backdrop of a more stable oil price. This sustained improvement in the oil barrel price (at the time of writing $74/barrel) has created a stronger platform for companies to evolve, adapt and make informed decisions. Importantly, this bodes well for Aberdeen’s commercial property market going forward. Whilst it is true to say that 2019 may have got off to a slow start in terms of take up in both the office and industrial sectors, with transactions characterised by smaller deals, there is confidence amongst agents that Q2 ’19 will see much improved levels of activity.
Indeed, at Graham + Sibbald we have had an encouraging number of our listed properties go “under offer” since the turn of the year across all sectors, including retail, industrial and office properties. Of particular note, is renewed interest in Aberdeen’s traditional West End, which as recently lost our to some of the newer city centre office buildings. This clearly demonstrates that whilst there is undoubtedly rising interest in collaborative working, there is still demand for self-contained buildings or character, offering the best of both worlds, whilst not compromising on identity.
Oversupply, particularly in the office sector, remains an issue in the Aberdeen market. However, as predicted, redevelopment of older buildings no longer fit for purpose to alternative uses is now occurring. This will result in a welcome rationalisation of stock, examples including the change of use in upper floors in Union Street, from offices to residential, Custom House in Guild street subject to a planning application for flatted development and the demolition of Silverburn House at Bridge of Don, formerly home to GE.
Another recent trend is the growth in requirements from “non-traditional” sectors, such as roadside, fitness and healthcare. Graham + Sibbald is currently marketing the Peter Nicol Squash & Fitness Club in Westhill which is attracting significant interest. The Care Home market is another active sector and G+S is involved in a number of site disposals on behalf of retained clients. We also have current acquisition and disposal instructions from a nation firm of funeral directors seeking additional representation in Aberdeen.
In terms of infrastructure, the recently completed Aberdeen Western Peripheral Route (AWPR) has been an outstanding success, improving connectivity throughout the city and substantially reducing drive times, particularly from north to south. This is already impacting on occupier location criteria with more footloose requirements emerging. The forthcoming opening of The Exhibition Centre Aberdeen (TECA) at Dyce and the new harbour development at Nigg will also enhance Aberdeen as a destination.
Graham + Sibbald has expanded both its commercial and residential teams in Aberdeen over the last year to accommodate the demands of the rising market. We are confident the future is bright…
Article published in Commercial Property Weekly