RENTAL GROWTH
ANNUAL TAKE-UP
LONDON
, UNITED KINGDOM
In the UK and EMEA, London represents the principal trading location as well as
a strategic location in terms of business-to-business activity, political lobbying
and a range of other activities. As a result London and the associated satellite
markets have representation from all the major energy, support and ancillary
services, including legal and financial services. It is also a location whereby
the top global talent is likely to be attracted to and therefore seen as a strong
candidate location to establish a global or regional headquarters. The UK
government is also seeking to establish the UK as a global centre of expertise
in opening up the Arctic to exploration by oil and gas companies, promoting
London as a hub for business services, and in doing so helps protect the niche
that London has created in this field.
In terms of real estate, oil and gas firms occupy major tranches of real estate in
all of the key London markets from Chevron at Canary Wharf and in the West
End, Shell Mex House on the Strand, and ExxonMobil’s out-of-town campus
in the satellite market of Leatherhead. Given the critical mass of firms using
London as a local and regional hub, it is likely London will continue to be a
location in demand for the sector.
ABERDEEN
, UNITED KINGDOM
Aberdeen has the second highest concentration of oil and gas expertise after
Houston, despite the UK only being the nineteenth largest producer of oil
globally, and is recognised as a global centre of excellence. A 2010 estimate by
the local government suggested well in excess of 1,000 companies in Aberdeen
City and Shire that operate wholly or predominantly in the energy sector.
Being a major, regional oil producing centre, located in close proximity to the
world’s largest oil production zones in the Middle East and Africa, having a
stable political environment, and a harbour that is a global hub for the traffic of
oil field equipment, make Aberdeen a crucial hub for the foreseeable future.
As with the rest of the global economy the property market in Aberdeen was
affected, however the rebound has been quicker and has consistently been
above the UK average for the last three years. As can be seen in the graphs
below showing the annual take-up since 2010, Aberdeen has rebounded strongly
and 2012’s take-up has surpassed the previous recorded high in 2008. Coupled
with a limited amount of speculative development taking place and effectively
100% occupation of the current grade A stock, the upwards trend on Aberdeen
rents is likely to be sustained for the foreseeable future.
20
2006
2007
2008
2009
2010
2011
2012
2013
%
15
10
5
0
-5
-10
-15
-20
Aberdeen
Edinburgh
UK
2000
0
200
Annual income (000s sq ft)
400
600
800
1,000
1,200
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
LAGOS
, NIGERIA
Nigeria is the twelfth largest producer of petroleum in the world, the eighth
largest exporter, and has the tenth largest proven reserves. The sector accounts
for 40% of GDP and 80% of government earnings. Despite Port Harcourt being
the chief oil-refining city and Abuja being the capital, it is Lagos that is the
country’s economic focal point and home to both domestic and international
energy firms’ headquarters. A combination of comparably higher quality of life,
international connectivity (thanks to one of the largest international airports
and the largest port in Africa) combine to make Lagos a location in demand.
The impact of this demand profile can be clearly seen in the rental rates being
charged by landlords in the graph below. A combination of limited availability
of grade A stock and an ever increasing number of requirements has given rise
to a huge increase in rental rates. Lagos is now not only the most expensive
market in Africa (17,590 USD per workstation per annum), but also ranks third
most expensive location globally after London and Hong Kong.
1,000
2007
2008
2009
2011
2012
2013
800
600
400
200
0
Grade A office rents (USD per sq m/year)
6 DTZ | In Situ
