Aberdeen’s Energy Transition Zone (ETZ) accounted for 35% of the city’s take-up from industrial occupiers last year, rejuvenating the city’s southside and helping to deliver the third best year of the last decade.

During 2024, there were 768,000 sq. ft. of industrial take-up in Aberdeen across 97 deals – well ahead of the 10-year average of 690,000 sq. ft. It was the third strongest year since 2015, only 2022 and 2023 were higher, continuing the post-pandemic surge in the sector.

Availability of space fell to 2 million sq. ft. for the first time in recent years, dropping from 2.5 million sq. ft. during 2023 as increased deal activity ate away at supply. Around 200,000 sq. ft. of this is currently under offer, suggesting vacancy rates could test new lows in 2025.

Dyce has the highest share of vacant space at 31%, while Altens and East Tullos represented a further 23%. Westhill continues to be one of the most popular industrial locations in the region, with historically low vacancy figures.

Created in 2021, the ETZ aims to support Aberdeen and the wider region’s energy supply chain, delivering new and brownfield development sites through a coordinated revitalisation of the existing industrial estates at Altens and East Tullos.

Before the formation of the zone, these areas accounted for an average of 22% of take-up, which has now risen to 32%, a 45 % increase according to Knight Frank’s analysis.

David Gavan, surveyor at Knight Frank Aberdeen, said: “ETZ has completely changed the image of Altens and East Tullos – these areas now account for the largest share of industrial take-up in the city.

We expect the zone’s popularity to continue, with just under half a million square foot available and a good share of requirements continuing to look at the southside as a whole – two years ago, that wasn’t the case.”

With the supply of good-quality space tightening and occupier expectations rising, competition for the best stock is intensifying. Tenants looking to secure well-located, modern premises are now finding fewer opportunities to consider, as the availability of best-in-class buildings continues to shrink.

For landlords, investing in building refurbishments isn’t just an opportunity – it’s quickly becoming a necessity to remain competitive.”

Scott Hogan, head of Knight Frank’s industrial and logistics practice in Scotland, said: “A limited development pipeline is an issue not just for Aberdeen but for the whole of Scotland, save for pockets of new speculative development, with good quality stock continuing to be taken up often at new headline rents.

Within Aberdeen specifically, occupiers are increasingly looking for best-in-class, modern warehouses with yard space. Refurbishments delivered to this specification are commanding the best terms given build costs, amongst other factors, are rendering new schemes unviable for now.”