Brace of Granite City commercial property deals despite North Sea downturn

Rockspring Property Investment Managers, represented by CBRE, has purchased Annan House, a new design and build headquarter office building let to EnQuest plc on a 20 year term for £45.1 million representing a net initial yield of 6.35 per cent.

Located in the heart of the North Dee Business Quarter, Annan House is 120,000sq ft of Grade A office space over eight floors. EnQuest is now working out of the impressive new HQ having consolidated and moved in July from its previous two Aberdeen addresses

CBRE also advised Dandara on the forward sale of the new 70,000 sq ft KCA Deutag headquarters office facility within the prestigious City South Business Park. The building has been pre-let to KCA Deutag Drilling Ltd for a 20 year period. The purchase price of the HQ was £23.5 million, reflecting an initial net yield of 6.03 per cent and was sold to a private investor.

The building occupies a prominent position within the Park, located to the south of the city with direct access to the A90. Completion of the building is due in July 2016.

Gordon Pirie, director of CBRE in Aberdeen, said: “Completion of these significant transactions shows that despite recent turbulence in the oil and gas industries, the commercial property investment market remains active where good quality product let on long leases to strong covenants is available.

“One positive aspect of the Aberdeen market in recent times is that some of the mainstream institutions that have purchased in Aberdeen in the past three to four years have been less active but this has opened up opportunities for other buyers who had recently found it difficult to secure representation in the city. These transactions show that Aberdeen is still very much on the radar of investors. Aberdeen is still one of the few places in the UK where you can achieve long term income secured by good quality tenants, with guaranteed income growth performance at competitive pricing in comparison to the rest of the UK regional market.

“There are also positive messages for the occupational sector with the conclusion of the Enquest and KCA Deutag deals offering evidence of international oil and gas companies seeking to maximise the efficiency of their real estate. Their commitment to long term leases further cements the reputation of Aberdeen as a global energy hub.”

CBRE represented Rockspring and Knight Frank represented EnQuest; CBRE & FG Burnett advised Dandara.