Vacant Office Space Hits Record High in Aberdeen as North Sea Downturn Continues
Vacant space in Aberdeen’s office market has hit record highs as oil and gas companies continue to feel the pinch in the granite city.
Research from property agency Knight Frank found that cost cutting across the industry had resulted in reduced tenant demand, pushing available space to rent above two million sq ft for the first time.
The figure could grow by a further 17.5pc as a number of major office developments currently being built in the city are completed without a deal agreed to lease the space.
Katherine Monro, a partner in Knight Frank’s Aberdeen office, said: “Many of the developments which are now being concluded were committed to well before the low oil price began to take hold and at a time when conditions in the commercial property sector were very different.
“Whilst there will be obvious concerns from a developer’s perspective, there are naturally opportunities for occupiers which did not exist previously.”
The news comes as offshore engineering and construction company McDermott confirmed it is to close its Aberdeen business development office.
A spokesman said the majority of staff had been reassigned to the company’s offices in Epsom and other locations, and that no redundancies had been made.
Other large companies have chosen to consolidate their operations in the city in the last year. Subsea 7, which employs around 2,000 staff in Aberdeen, said moving its office operations into a small space had allowed the company to be more “cost-conscious”.
Meanwhile, Wood Group is consolidating its existing properties in Aberdeen into three campuses – in central Aberdeen, and north and south of the city. A spokesperson for the company said this was part of “a long-term strategy” to “improve building and cost efficiencies”.
However, a spokesperson from Aker Solutions, which in 2014 agreed the city’s largest-ever office deal at Aberdeen International Business Park, said the company still intended to occupy all the space.
Across the wider north east of Scotland, around 40,000 workers in the oil and gas industry have been made redundant in the last 18 months, according to figures from Aberdeen & Grampian Chamber of Commerce.
