An Aberdeen property professional has called the bottom of the market after demand for offices in the Granite city grew strongly in the second half of 2016.
New figures show office take up in Aberdeen grew 53% in the last six months of the year compared to the first half of the year when only 86,500 sq feet of office space was let, property agency CBRE said.
Overall, office take up in 2016 dropped 41% when 218,708 sq ft of office space was let.
The second half of the year also saw three offices sold to investors in deals worth £19million, compared to zero sold in the first half of 2016.
The largest of these was the sale of the Prime Four-based offices of Anderson Anderson Brown (AAB), which was sold to an un-named private foreign investor on behalf of developer Drum Property Group for £17.2million.
CBRE said the weak demand among commercial property investors for assets in the region was due to uncertainty after Brexit, the prospect of a second independence referendum and the “detrimental impact” of the oil and gas downturn.
CBRE said current demand from investors was coming from family offices and private investors “looking to capitalise on the absence of institutional investors in the market at the present time”.
Gordon Pirie, director of CBRE in Aberdeen, said: “Following two years of falling oil prices, H2 2016 saw a steady increase and there are signs of a return to a positive sentiment in the oil and gas sector.
“We believe we may well be at the bottom of the cycle.
“However time will tell how quickly an upswing happens and how this translates into increased occupier demand.”
CBRE said speculative office development would be “not likely” in the first half of the year but that others would refurbish newly vacated buildings.
It added: “We expect that occupiers will continue to consider relocation options to the new developments including Marischal Square and the Silver Fin Building, plus the best refurbished stock as they look to move to more efficient open plan offices.”
Mr Pirie added that office rents would be unlikely to rise in the near future.
He said: “With new developments nearing completion in the city centre and occupiers still awash with grey space, supply of secondary stock may take some time to be absorbed and rents will remain under pressure.”