The Aberdeen office fit-out specialist that revamped Union Street’s Silver Fin building for Shell passed £40 million sales last year.
Space Solutions founder and chairman Steve Judge said business in Aberdeen had been focused on repurposing older building stock.
He said lack of Grade A office space in the city had led to an increase in projects to “reinvent and rejuvenate older, good quality spaces”.
The firm saw a 6% bump in its revenues in the year to June 2024, but pre-tax profits decreased to £807,000, compared to £826,000 the previous year.
“Profitability is disappointing, that’s a fact,” admitted Mr Judge, “but that is reflective of a sluggish market.”
‘Deal drag’ in commercial property
Meanwhile, he said there was ongoing “deal drag” as uncertainty caused delays in decision-making from clients.
“2024 was reflective of prevailing economic conditions and uncertainty in the market,” he said.
“The presumption against oil and gas industries from both Holyrood and Westminster has had an impact on companies in north-east Scotland.”
More certainty is needed to improve the underlying level of confidence in the region, he said.
“We need there to be a more supportive government that is about a just transition as opposed to just ‘turn it off and it’ll be okay’,” he said. “I mean that’s not the case at all.”
Space Solutions principally operates in Aberdeen, Dundee, Edinburgh and Glasgow and take up of commercial property had been low everywhere.
Windfall tax felt in north-east
However, Mr Judge noted it was down by double digit percentages in Glasgow and Aberdeen.
The north-east had been hit by an extension of windfall tax on oil and gas profits, which he said had had an “adverse impact”.
In his strategic report accompanying the accounts, Mr Judge also highlighted challenges from high levels of inflation and interest rates.
“The combination of these factors has become a challenge that the business has had to adapt to which it has done well,” he added.
“Supported in no small part by a loyal customer base and high levels of repeat opportunities that comes from that established client base.”
The West End headquartered firm, which has 121 employees, has seen an increase in demand from renewables companies.
It is also working with companies keen to reduce costs.
“The big trend we are seeing right now is consolidation,” said Mr Judge.
“There are a number of businesses we’ve been working with who’ve been disposing of assets.
“Cost reduction is an imperative.”
Working hard to stay relevant
Meanwhile, occupiers were being more discerning with the space they have.
“It’s not just about how pretty a space looks,” said Mr Judge.
“It’s very much about how the space performs and how it meets the needs of the business.”
While Space Solutions continues to perform well, the chairman said it is not a market it takes for granted and works hard to stay relevant.
He added: “We have the skills for the repurposing, refurbishment, and rejuvenation of older building stock which is more affordable than new building at the moment because of the economic conditions.
“That plays well to our strengths and that’s representative of where our focus is.”
Conversation