CBRE research reveals Aberdeen office market performance in third quarter of 2023

Dominic Millar (CBRE)

LEADING real estate advisor CBRE has released its latest figures on the Aberdeen office market during the third quarter of 2023.

Take-up of office space for the third quarter of the year totalled 141,789 sq ft, reflecting a 167% increase on the previous quarter’s 53,091 sq ft figure and a 196% increase on the same period in 2022. It brings the total for year to date to 258,431 sq ft.

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The substantial take-up figure was achieved across 29 deals with the largest transaction being Odfjell Technology’s 19,464 sq ft letting at Prime View, Prime Four, in which CBRE was involved. There were multiple sub-lettings at Prime View in the third quarter totalling the disposal of almost 35,000 sq ft. SSE and Cegal also acquired 9,990 sq ft and 5,694 sq ft respectively at the building and as a result, space at Prime Four, one of Aberdeen’s premier out of town business locations, is now extremely limited.

Other considerable deals included Kellas Midstream taking 10,149 sq ft at The Capitol on Union Street and COSL Drilling’s 6,550 sq ft relocation to iQ Building in the city centre.

Encouragement should be taken from the city’s continued falling office availability, with supply now sitting at 2,124,448 sq ft, down from 2,510,371 sq ft in the previous quarter and the lowest it’s been since 2015. As always, Grade A space within the city remains in shorter supply at approximately 206,538 sq ft, as the requirement for best-in-class space continues within the Granite City.

Dominic Millar from CBRE in Aberdeen, said: “After a slower start to the year, the Aberdeen office market has bounced back with an encouraging third quarter of occupational take-up, surpassing the total for the first half of the year. We expect this letting activity to continue into the final quarter of the year.  

“However, this upward trend will likely come up against a lack of new Grade A development as Aberdeen faces a shortage of new, best-in-class office space. Since completion of schemes such as The Capitol, Marischal Square and The Silver Fin Building in 2018, there hasn’t been any significant new office development, and with an office stock figure of 10.3million, the new Grade A vacancy rate is a low 2%. 

“With little development coming out the ground, the focus will be on landlords refurbishing older stock to meet the increased occupier demand for best-in-class, ESG-compliant space.”

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