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Knight Frank confirm buoyant start to the year for north-east commercial property market

Aberdeen Market.

Picture by COLIN RENNIE  December 8, 2016.
Aberdeen Market. Picture by COLIN RENNIE December 8, 2016.

Knight Frank is the latest key industry player to confirm a buoyant start to the year for the north-east commercial property market.

The international consultaancy said yesterday there was strong evidence to suggest the early momentum would continue throughout 2018.

A string of investment opportunities have recently come onto the market as the region recovers from the oil crash in 2014.

Aberdeen-based Knight Frank partner Richard Evans said property offering long-term secure income was particularly attractive to investors.

He added: “After shying away from the market for the last few years, investors appear to be showing interest again and are not put off by the bare facts of record levels of over-supply in the office and industrial sector.

“The new Starbucks at West Park at Blackburn has attracted a good amount of interest, leading the agents to look at setting a closing date in the very near future.”

Knight Frank is also aware of two retail investments in Union Street which were marketed towards the end of last year, with one now under offer and one sold.

Mr Evans said: “Interest in city centre retail space is encouraging because it illustrates that investors retain confidence and are prepared to take a long term-view to benefit from the city centre masterplan.

“The implementation of the masterplan … will remain pivotal in encouraging investors to come into the market and equally to work with the council in upgrading its property to bring in new exciting occupiers to enhance the city centre offer.”

As an example, Mr Evans highlighted the Aberdeen indoor market and former British Home Stores building.

Landlord Rockspring Hanover Property Unit Trust is working closely with the council to bring forward major redevelopment plans.

Mr Evans also highlighted increased inquiries for space for lease or purchase in and around Aberdeen, adding: “Compared to last year, where there was a feeling that many inquiries were fishing exercises, this year there is more a sense of occupiers seriously looking at options and willing to commit.

“The recovery of the oil price since last November to a high of $70 is sure to provide the confidence and positivity that buyers have been lacking for the last few years.

“Knight Frank research shows a direct correlation between oil price and commercial property take-up, irrespective of outside political factors.

“Provided this is sustained and we see a reciprocal confidence with re-employment in the oil industry, we foresee a more buoyant year ahead.”