Aberdeen’s commercial real estate market experienced a surge in investment in 2024, with transactions totalling £357 million — three times the previous year.
According to property group Savills, the total deal value is more than double the 10-year average of £160 million.
The boom is largely attributed to overseas investors seeking high-yield opportunities in the market following a significant price drop.
The biggest deal of the year was the £110 million sale of Union Square Shopping Centre to Lonestar, accounting for almost a third of Aberdeen’s commercial transactions and around 90% of the city’s retail investment.
Aberdeen commercial property deals
Meanwhile, the office market also saw an uptick, with £128 million in transactions in 2024 — an 80% jump from the 10-year average and five times higher than 2023.
Savills was involved in 75% of these deals, including the £45 million acquisition of Prime 4 for EEH Ventures Ltd, the sale of BP’s Aberdeen Headquarters to DS Properties for £16 million and the sale of TotalEnergies House, Westhill for £18 million.
Another notable transaction deal was the £32 million sale of Annan House to an Israeli investor.
Savills noted that over 75% of the office investment in Aberdeen came from overseas buyers, with interest from the US, Europe, and the Middle East continuing to drive demand.
Attractive yields draw global investors
The firm expects this trend to persist into 2025, as Aberdeen prime yields remain significantly higher than those in other major Scottish cities.
While office yields in Edinburgh and Glasgow are around 6.5% and 7.5%, respectively, Aberdeen’s prime yields stand at over 9%, providing a strong incentive for international investors.
Mark Fleming, investment director at Savills Scotland, said the rise in deals seen in Aberdeen in 2024 followed a period of “significant falls in asset values” resulting in “extremely attractive yields”.
“In addition, we saw some return in investor confidence as inflation pressures receded, cost of debt began falling and people started to return to their offices post Covid.” he said.
“Looking ahead we anticipate that Aberdeen commercial real estate will remain appealing to investors in 2025 due to the attractive yields on offer.”
Overall, regional investment activity in Scotland picked up during 2024, with transactions totalling over £2 billion.
Aberdeen saw the highest percentage increase year-on-year across all markets.
Ten bids for TotalEnergies facility
Eilidh Levein, investment associate at Savills Scotland, adds: “It has been great to see the resurgence of interest in the Aberdeen commercial real estate market from investors.
“For example, we received around 10 bids when we set a closing date on the TotalEnergies facility at West Campus in Westhill.
“This just demonstrates the latent demand from investors in the city where assets are priced correctly.”
Other sectors that performed well in 2024 were industrial and logistics, with investment totalling £24.87 million in Aberdeen.
In line with the 10 year average, this reflects a trend across the rest of Scotland where industrial volumes have remained muted.
This has been put down to limited access to finance in the first half of last year, caution among some buyers, and few vendors wishing to sell into a less optimal market.
Despite this, notable deals included Remake’s acquisition of Hydrasun Group, at Aberdeen’s Gateway Business Park for around £14 million.
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