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Tuesday, November 13, 2023

Aberdeen tops for UK prime office rent increase

According to research from property consultancy, Knight Frank, Aberdeen has topped all other UK cities, including Central London, Birmingham and Manchester, with the highest rate of increase in prime office rents in the last six months.

Knight Frank's recently published ROMP research (Regional Office Market Presentation), its online interactive tool which provides detailed market comparisons of all the key regional UK cities from 2002 onwards, highlights the strong performance of the Aberdeen office market as prime rents in the city have outperformed other markets with an increase of 12% to 24.00 per sq ft compared with 21.50 per sq ft in Q1 07.

Aberdeen has knocked the traditionally expensive boroughs of the West End and the City in Central London off the top spot as prime office rates in London have witnessed an increase of 10 per cent for both areas, compared with Aberdeen's increase of 12 per cent.

Since Q1 Glasgow has remained consistently stable at a rate of 27.50 per sq ft due to the significant growth achieved during the first quarter of this year. During the first quarter prime rents in the city rose by six per cent to 27.50 per sq ft (Q4 06: 26.00 per sq ft) beating all other regional cities, where rents remained flat, bar Birmingham.

The research also highlights Edinburgh as a city which has experienced further growth as prime rents have also risen by four per cent to 28.50 from 27.50 in Q1.

Katherine Monro, Partner, Knight Frank in Aberdeen commented: "The Aberdeen market has performed exceptionally well this year and a lack of high quality Grade A stock has continued to drive rents in the city. We have witnessed a steady rise in office rates throughout 2007 and as demand continues to outstrip supply this trend looks set to continue in the near future."

Drew Oswald, Managing Partner, Knight Frank said: "Despite well documented shifts in capital markets, the occupational market in Scotland has enjoyed another strong quarter and with Aberdeen clearly outperforming other UK cities it highlights a robust leasing market, secure rental levels and rising demand, which has facilitated rental growth for all regional markets across Scotland."

Commenting on the study of key UK office markets, Claire Higgins, head of commercial research, Knight Frank said: "The UK's office sector has been the least affected by the investment slowdown of the main property types, and this is in part due to the healthy rental growth still being experienced around the country this year. Five of the top 11 regional markets have already seen prime office rents increase this year, and by the close of 2007 all 11 are forecast to have higher rents than they did a year ago."