New data has indicated to property expert Simon Morris that commercial property sales in Aberdeen hit a three-year high in the second quarter of 2015.
Oil price crisis hits Aberdeen
As a hub of the UK oil industry, Aberdeen has long been one of the biggest drivers of Scottish economic growth. The world is currently experiencing a global oil price crisis. International oil prices sank from record highs of more than $100 per barrel in summer 2014 to around $60 per barrel at the time of writing.
This has hit Aberdeen’s economic prosperity; for example, the Herald Scotland indicated that the crisis has damaged the city’s lucrative travel and tourism industry. It suggested that passenger numbers at Aberdeen International Airport sank 8.1% from May 2014 – May 2015, whilst the occupancy rate of Aberdeen hotels fell from 77.9% to 68.9% from April 2014 – April 2015.
Aberdeen commercial property
Many experts predicted that the oil price crisis would also impact the city’s commercial property market, but this doesn’t appear to be the case. A Management Today article pointed out that a million square feet of office space was filled in Aberdeen from February 2014 – 2015, a new record for the Scottish city.
Meanwhile, the BBC recently reported that the value of commercial property deals conducted in Aberdeen hit £201 million in the second quarter of 2015; a three year high. This was discovered by research conducted by The Scottish Property Federation (SPF). They also found that the value of commercial property deals conducted in Scotland from April 2015 – June 2015 rose 56% on the first quarter of the year, to £963 million.
David Melhuish, the director of SPF, commented on the release of the study. He said: “Whilst the general economic commentary surrounding Aberdeen has focused on the impact of falling oil prices, it is striking to see that its commercial property market is going against the grain and retaining significant investment.”
Invest in Aberdeen?
This indicates that Aberdeen’s commercial property market is currently so strong, it can even withstand the global oil price crisis. Investors may believe that now is the time to invest in the city’s commercial property sector but Simon Morris would urge caution. The market may come down at any time, so investors should conduct extensive research before they invest in Aberdeen commercial property.