Take-up

Q1 2023 take-up totalled 54,000 sq ft across 17 transactions. This was 6% above the 10-year average for the number of completed Q1 deals in the Aberdeen market.

The largest deal in Q1 was the 10,000 sq ft Grade A letting to Xodus Group at The Capitol Building. This was the only deal over 10,000 sq ft in a quarter which saw the majority of its activity driven by lettings in the smaller size bands.

Supply

Total supply stood at 2.66 million sq ft at the end of Q1. This represented a 5% increase in the first quarter of 2023. Of this total, 86% was for Grade B/C space. Savills believes that a large proportion of this secondary stock may become obsolete without refurbishment.

Grade A supply stood at 370,000 sq ft at the end of Q1, which represented a 9% decrease on the Q4 2022 total. This is further evidence of the continuing flight-to-quality in the market and sees the Grade A vacancy rate fall a further 30 basis points to just 3.6%, the lowest figure that Savills has on record for Aberdeen.

Take-up by business sector

The Professional sector was the most active sector in Q1, accounting for 31% of overall take-up. This was spread across three deals, the largest being Xodus Group’s 10,000 sq ft acquisition at the Capitol Building.

Elsewhere, Extraction & Utilities continued its strong 2022 performance with 27% of total take-up in Q1 2023. This included lettings to Rosen at 42 Albyn Place and Anasuria Operating Company at H1, Hill of Rubislaw.

Rents

There was no change in the Prime rent in Q1 2023, which currently stands at £32.50 per sq ft. This means that there has not been Prime rental growth in the market since 2017. That being said, Savills fully expects that there is further room for growth, with most recent forecasts projecting 2% growth to £33 per sq ft in 2023, with further growth of 6% to £35 per sq ft expected by the end of 2027.

Interested in other areas of the UK?

View all of our latest Q1 2023 Occupational Office Data research here.