BP To Construct New Headquarters In Aberdeen
BP recently announced plans for a new 200,000 square feet office complex in Dyce, just outside Aberdeen. This new building will be BP's headquarters for its Exploration and Production activities in the UK, Norway and the Netherlands. BP aims to move all 950 of its staff and a further 200 contract workers by the end of 2007.
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Procurement and Construction Partner at Aberdeen law firm Paull & Williamsons, Ken Ross, explained the complexities of the deal: "The critical issue for BP was to drive the deal in a way that would enable them to get a building to meet their specific requirements. Developers normally start with a site acquisition, then scope the project and apply for planning before they seek potential tenants. As potential tenants ordinarily do not own the site on which the development is to be constructed, they have less scope to influence the final specification of the building or the commercial arrangements. However, in BP's case, they own the site and were therefore able to create a competition between different developers for the
opportunity to carry out this development.
"We concluded a deal which will see the successful developers, Akeler, purchase the site, design and construct the new premises to BP's specific requirements, with BP leasing the building back for an initial fifteen-year period. BP requirements were not simply about the design of the building, but also included best practice requirements in relation to the environment and health and safety, both of which are core values for BP. Akeler will also acquire all of the surplus BP Properties with a view to redeveloping these for mixed uses.
"To achieve BP's aspirations, a detailed technical scoping brief together with supporting material such as procurement contracts and template leases were issued to the developer market. Each developer was then invited to come up with innovative designs and commercial arrangements with those parameters.
"The deal structure was fairly intricate because of the mix of land sales, construction, leasing and potential financial arrangements. We drew upon a number of specific areas of expertise to bring together an integrated team of lawyers, which included specialists in leasing, site acquisition, construction and procurement, property investment and property finance. We worked very closely with senior BP personnel across the organisation, both locally and globally, in addition to a sizeable team of external technical advisors (commercial property agents, project managers, architects, engineers etc) advising BP on the project.
"This is a great deal for BP," continued Mr Ross. "They will boast outstanding, modern premises built to meet their requirements. Although the deal was challenging from a legal perspective, it certainly proved worthwhile given the successful outcome."
Reaction to the news was understandably positive in Aberdeen. The current high oil price and increase in North Sea activity has helped re-energise the city, not least the commercial property market. Other major deals have been completed recently and others appear to be on the horizon. Chevron, for instance, has just concluded a deal to lease 100,000 square feet of additional office accommodation at the city's Hill of Rubislaw to support its North Sea activities. Technip meanwhile, is now a year or so into its new expanded office space at Westhill which has allowed it to accommodate a significant increase in personnel.
Paull & Williamsons was involved in both these deals and is working with other operators and service companies on well advanced plans to significantly expand in the Aberdeen area.
"The commercial property market in Aberdeen is extremely buoyant at the moment," added Mr Ross. "The upturn in North Sea activity and the price of oil is largely responsible for companies such as BP re-affirming their commitment to Aberdeen. However, many businesses are increasingly finding their premises obsolete, particularly when they are looking to significantly add to their personnel. Indeed, we are aware of some companies thinking in terms of virtually doubling their staff. Furthermore, given the staff shortage in the oil and gas industry it is also becoming important to provide a first class working environment to help attract and retain employees.
Paull & Williamsons
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