IMPROVEMENT in oil price and continued stability in the oil and gas market has seen a 40% increase in the number of office lettings seen in 2018 compared to the year previously in Aberdeen.

According to the latest research from Savills, there was a take-up of 94 lettings compared to 68 in 2017, totalling 388,2227 sq ft.

The research also showed there was close to double the number of deals done in 2015, the year immediately following the oil crash.

Dan Smith, head of Savills Aberdeen and director in the office agency team, said: “An increase in the number of deals demonstrates strengthening levels of stability in Aberdeen’s office market with a greater number of smaller deals indicating a market less susceptible to fluctuation from large individual lettings.

“Despite a divergence of sectors following the oil crash, Aberdeen’s economic reliance on oil and gas industries remains and therefore when oil prices increase, take-up and investment volumes also improve.

“We consequently expect Aberdeen to see significantly higher levels of office take-up during 2019.”

Availability in Aberdeen currently stands at 2.7 million sq ft – 940,000 sq ft of which is Grade A, the highest quality and standard of office space available.

The firm believes this number will reduce through 2019 as the market supply begins to tighten and as the oil sector also improves.

The top rent deal in 2018 was achieved in three separate deals at The Silver Fin Building, which stood at £32.50 per sq ft.

Other key deals in 2018 included Aberdeen Journals, NHS, Tenaris and Spaces all committing to space at Marischal Square and CATS Management.

Barclays and Verus Petroleum also took space at The Silver Fin Building.

But 2019 is set to be an even more productive and positive year, with Savills saying it will be shaped by an ongoing “flight to quality” among occupiers in the city.

To further decrease supply levels in Aberdeen, functionally or economically obselete buildings will see a change of use – driven by vacant rates liabilities and continually evolving regulations in relation to energy performance.

A start has already been made – examples of offices going to alternative use to date include Southpoint House, which is now AXIS industrial unit, KMD Business Centre and Silverburn House, which were both bought at auction and are likely to go to alternative use.

Savills says Aberdeen City Council’s City Living Plan, which aims to attract 3000 more residential occupiers to the city centre over the next few years, will also positively influence the office market.

As too will the Aberdeen Western Peripheral Route and the South Harbour extension, both of which will open up new pockets in the city.

The roll out of a fibre network will also benefit Aberdeen’s office market by making the city one of the “best connected cities in the UK by 2021”.