The Press and Journal (Aberdeen and Aberdeenshire)
Market well placed to recover from fall
The commercial property market in Aberdeen is well placed for recovery when the global economy emerges from the impact of coronavirus and a collapse in oil prices.
That was the upbeat prediction last night from Eric Shearer, senior partner and head of office in the Granite City for property consultant Knight Frank.
Mr Shearer said: “Heading into the second quarter of 2020, we have seen material impacts to global markets following the Covid-19 pandemic.
“Combining this with the oil price conflict between Saudi Arabia and Russia has resulted in a turbulent oil and gas market – resulting in oil prices in March almost half of what they were the previous month.
“This will clearly have an adverse impact on the local economy in the north-east of Scotland, and we have already seen an impact on decisionmaking for commercial property in the region.”
Knight Frank’s Aberdeen office launches its latest annual commercial property market report today.
Looking beyond the current crisis, the report says there will be pentup demand across all sectors from both occupiers and investors. There was a steady increase in deals and inquiries before Covid-19 impacted the market, it adds.
The report also highlights an “encouraging” 2019, boosted by strong occupational demand and an improving investment market following the general election result.
Mr Shearer said: “While there is uncertainty in the market now, both oil and property markets have learned to innovate and adapt.
“With a number of exciting public and private sector projects proceeding and an improving working environment, this should ensure that Aberdeen and Aberdeenshire’s commercial property market remains in shape.”
Knight Frank says the total value of office and industrial transactions in Aberdeen during 2019 was £185 million, compared with £206m for a similar number of deals in 2018.
The total supply of office space in the Granite City is currently sitting at 2.5 million sq ft, with 44% of that in the city centre, the report adds.
Knight Frank also says a key theme of 2019 in Aberdeen and Scotland as a whole was the large proportion of overseas buyers, with more than half of investment coming from international sources and the Granite City attracting interest from the Middle East in particular.