The previously buoyant office market in Aberdeen is in a slump amid fears over oil prices and North Sea operators trying to slash costs Ryden says in its latest Scottish commercial property review.
Uncertainty over the independence referendum dragged on Scotland’s main markets into autumn, the report says.
Ryden partner Mark Robertson adds: “City office markets had a quieter period pre-referendum, although the slowdown in Aberdeen is attributable to lower oil prices and cost-cutting by North Sea operators rather than democracy.”
The Granite City has enjoyed a phenomenal spell of growth in its commercial property market in recent years.
Demand for new office space, fuelled by high levels of activity offshore, has driven up rents to Scottish records and lured property investors to Europe’s energy capital.
But Ryden’s 75th Scottish Property Review says the good times are over, at least for now.
It adds: “After a long run, the office market in Aberdeen has turned and we have seen a relatively poor six months of take-up – 39,355 square metres (423,614 square feet) has been transacted over 51 deals, which is down 29% on the last six month period.
“Supply has increased by 39% to 85,300sq m (918,162sq ft as speculative development starts to come into the equation.
“At the time of writing, the Brent Crude Oil price sits at just below $85 per barrel, which is 21% lower than six months ago (it has fallen further in the past week).
“This is due to a number of factors, including the US shale gas boom, global growth concerns and ample worldwide supplies.
“The price, however, is expected to increase again, with forecasts for Brent crude figures ranging between $96 and $108 per barrel for 2015.
“In addition to this lower price, drilling activity is down and a general squeezing and cost-cutting within the industry has led to a reduction in demand for office accommodation.
“Industry figures are predicting this will remain the case for the majority of 2015, but the situation will then improve again – assuming there is no significant reduction in the predicted price per barrel.”