Aberdeen is living proof that London is not the only commercial property market in the UK which is performing well. It is oil money which is leading this charge for the Aberdeen commercial property market. This is not money from wealthy individuals from oil rich countries such as Russia and Dubai, it is money from the oil companies themselves.
Aberdeen is not somewhere anyone would immediately associate as glamorous and wealthy, yet Property Week has given the city the moniker of ‘Britain’s forgotten boom town.’
Aberdeen is not unaccustomed to success, in fact the Granite City experience boom time during the 1970s, when many American companies moved in to exploit the North Sea’s oil reserves. Aberdeen though is fully accustomed to the term boom and bust. During the late 1980s the price of oil plummeted, resulting in many of the oil companies leaving the city.
It was at this time that a popular Aberdeen car sticker read as follows: ‘Dear Lord, please let there be another oil boom. We promise not to piss it away this time.’
This prayer has been answered and Aberdeenshire now boasts the 13th highest GDP per capita of the 271 regions in the European Union and is one of the most prosperous cities in the UK, with an unemployment rate of just 1.7 per cent. In fact, the Times reported that Aberdeen is one of Bentley’s sales hotspots outside southeast England.
As a result of the oil rich economy the commercial property market in the area is rapidly expanding. Helen Gordon, director of Legal & General’s Life Fund, told Property Week: ‘There are certain characteristics that you look for when investing in retail and Aberdeen has them: low reliance on public sector workers, a diverse economy and affordable rents. The three big REITs [British Land, Land Securities, and Hammerson] have holdings there, so that tells a story.’
Office space in the area is also hot property, with Knight Frank recently reporting that energy related companies are searching for a whopping 325,000 sq ft of grade A office space in the Granite City.
With only 20,000 sq ft of office space available in Aberdeen, we can expect to see a large number of commercial property planning applications arriving at the council offices.
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