Exceptional 2011 Down To Buoyant Energy Sector

Aberdeen’s commercial property sector has had an “exceptional year” in 2011 which can largely be attributed to the once more buoyant energy sector, according to FG Burnett managing director Angus MacCuish.

“The supply of office and industrial space was very tight and the imposition of closing dates for competing interests for stock was a strong indicator of how the Aberdeen market is performing.

There is little doubt renewed confidence in the energy sector which underpins our city has pushed forward new or long awaited projects like ABZ Business Park at the airport and it’s encouraging to see the diggers on-site installing infrastructure.

Westhill continues to be a strong pull and aside from owner occupier activity by the likes of Hallin Marine, Gladman Development’s Abercrombie Court has secured a number of pre-lets on smaller office developments and just signed off a lease on its 25,000 sq ft headquarter building.

Drum Property Group can also feel pleased with themselves in 2011, having secured pre-lets to Apache North Sea, Nexen Petroleum and Transocean Drilling for Phase One of its Prime Four business park at Kingswells. These are landmark deals which will not only generate a lot of construction activity, but send out an important statement that these organisations are committing to Aberdeen for the long term and it all bodes well for the local economy.

On the retail front, new lettings in the Bon Accord and Union Square centres and a total remodelling of the Bon Accord food court, alongside planning approval for Triple Kirks - so long a blight on the eyes - are all positive factors in making our city centre more attractive to residents, visitors, investors and employers.

Looking ahead to 2012, we must hope the Eurozone meltdown is not as apocalyptic as predicted but I fear the fall out could have wide ranging consequences and result in further shortages of funding for projects.

The Aberdeen business community can do their best to mitigate this by giving developers and their funders the confidence to engage on speculative projects in the strong belief we will find occupiers without too much trouble.

As far as rental values are concerned, I expect levels to remain steady, with better quality properties benefiting from uplifts in rental inflation. On the investment side I firmly believe outside of London there is no stronger market than Aberdeen. The problem has often been potential investors don’t understand the energy sector and have consequently shied away from it, but for those who have invested in Aberdeen over the years, they have tended to do very well.

If I could have one wish for 2012, it would be for a quick and final decision on the Aberdeen Western Peripheral Route, which is dragging through the courts. Positive news on AWPR would be a tremendous boost to the region, opening up potential new development sites. It would not only open up new locations but would ease city centre congestion and have a positive impact on the city’s economy.”