Aberdeen, Aspc Stats

[sfr]

I had heard WG were heavily benefiting from a job in Kazakhstan, but that was due to finish in March (i.e. this month).

There can't be much topsides work left in the North Sea at the moment?

It finished for a lot of people! On Friday...

[Oily]

there's pain, there's job cuts, but it's when companies go full-scale bankrupt that will have a big affect on the city.

It could be fab shops, or engineering firms or companies that sell desks and chairs for hundreds of pounds a pop.

My sources say a company that provides solutions for spaces is in dire straits.

Thanks for the heads up regarding the alluded to company - I have a pal who works there. I've just checked out their most recent group accounts and the indications are not that good: sales down 10% and profit down 80% vs the previous period. Possibly more revealing is the near 50% drop in trade debtors which likely reflects a similar fall in sales. The most recent accounts are to mid-2015 so things could have significantly deteriorated since then and, given the nature of the business and its heavy reliance on commercial property developments, it's likely your sources are correct.

[cashinmattress]

Then apparently he started moaning he may not have enough to pay his VAT.

There are many in this exact situation.

Have always spent every penny, waited until the due date and cashed in that month and the month's previous contract wad.

You give HMRC a reason to audit... like failing to pay tax, you are going to get your collars felt.

HMRC can go back 20 years boys, and this 'test' on public sector PSC contract is just that. A testing/debugging phase.

The private sector loophole will close, that is a 100% sure bet.

Edited March 28, 2016 by cashinmattress

[reverand_cat]

Anecdotally, an acquaintance of mine picked up his new Range Rover on Wednesday there. Then got his notice on Friday.

I know a fair few people who moved house recently. They bough their last when prices were slightly more subdued around 2009/2010.

They could have been sitting okay, but they had to go pile in with more debt and get a bigger house (note they didn't need extra rooms). Because losing their job "won't happen to them".

It is endemic. Lots of these people could have been sitting okay, but they had to buy that bit more.

I know lots who have now had plenty time to prepare for the crash, but instead went on buying bigger houses and bigger cars when it was absolutely obvious the oil industry in Aberdeen was on shakey ground.

What are we supposed to do? Bail out those who have obviously been reckless?

Edited March 28, 2016 by reverand_cat

[cashinmattress]

http://www.offshorepost.com/is-shell-about-to-exit-the-north-sea/

Is Shell About To Exit The North Sea?

As evidence emerges indicating that the supermajor is getting ready for such an event, could rumours of a Shell exit really be true?

Since finalising its acquisition of rival oil and gas firm, BG Group last month; Shell has been open about its need to offload at least US$30 billion worth of assets, to help rebalance its books.

That need continues to grow with increasing urgency as the mammoth $70 billon acquisition, originally put forward in times when a barrel of oil looked unlikely to ever go below $100, struggles to look financially viable in times when it looks unlikely to ever go above $50.

Shell CEO Ben van Beurden Back in February, when answering questions on the proposed US$30 billion asset sell off, Ben van Beurden said that it would be a good time to sell, claiming that “the buyers are there, … and in non-traditional routes such as MLPs, private equity and other oil and gas companies.”

When asked for a time schedule, van Beurden said: “This will build over that three-year period and 2016 is likely to see asset sales that are below the $10 billion mark.”

Move To Offshore LNG

With BG Group’s assets now firmly on its books, Shell can boast the world’s biggest producer of LNG, much of which is centred in Brazil, Australia and the deepwater Gulf of Mexico.

Shell’s own offshore LNG project, Prelude, is expected to reach first production later this year.

The giant FLNG vessel will be the world’s largest offshore facility once on-stream, having the displacement greater than 5 Nimitz class aircraft carriers combined, and will be located offshore Western Australia.

The move is yet another step by Shell, away from its traditional offshore activities and, into the more technically challenging and less crowded market of deepwater and unconventional offshore production.

Shell CEO, Ben van Beurden, alluded to the company’s refocus during a press conference, held to announce the completion of the BG acquisition, back in February 2016.

van Beurden said: “We have acquired productive oil and gas projects in Brazil and Australia and other key countries.

We will now be able to shape a simpler, leaner, more competitive company, focusing on our core expertise in deep water and LNG.”

Oil Super Majors And The North Sea

It’s no secret that both reserves and production right across the North Sea sectors continue to decline, with 2015 production rates on the UK continental shelf 65% below that of their peak- around 2000.

This coupled with the increasing frequency of statements from Shell, and a North Sea that continues to become ever more crowded, by much smaller, leaner producers, adds weight to the argument that Shell really could be ready to exit.

Most assets currently operated by Shell in the North Sea are either already in their decommissioning phase, look at crude oil’s own benchmark namesake Brent Field for example, or have desperately dwindling production rates.

The same ingredients proved ideal for similar action by rival BP back in 2003, when it sold off what most regarded to be the company’s crown jewels and largest oil field in the North Sea – the giant ‘Foggy’ Forties.

The move was part of BP’s then global expansion, that saw it move heavily into the Gulf of Mexico, Azerbaijan and most notably Russia.

Although it must be said that BP continues to operate a select number of assets in the North Sea.

So Is Shell About To Exit The North Sea?

Over the last 24 hrs, speculation across the globe has been growing in weight to suggest there will be a UK asset sell off of some kind.

Having contacted Shell’s London HQ, Monday, the company confirmed to Offshore Post that, the leading financial advisory and asset management firm Lazard has been brought in to advise the team working on the company’s divestment strategy.

Further, Shell confirmed that both Bank of America Merrill Lynch and Morgan Stanley have been appointed to work on some asset sales.

A Shell Spokesperson added: “We expect several banks to bid for and get transaction mandates for our $30bn asset-sale programme.”

Shell has refused to comment further, declining to give any indication as to the future of individual assets and likely buyers. However one potential buyer that has been more open about their intent on acquiring some of Shell’s North Sea assets, and centre for much of the recent speculation, is newly formed Neptune Oil and Gas, headed up by former Centrica CEO, Sam Laidlaw.

A spokesman for the fund has been quoted as saying “Shell’s North Sea assets are being considered as part of our wider strategy to target large-scale investment in distressed assets in the North Sea, North Africa and South East Asia.”

So is Shell about to exit the North Sea?

The ongoing and obligated work to decommission assets aside, it is a case of watch this space. But if a Shell exit is imminent, whatever the scale, we will all know very soon.

I've been hearing Chinese whispers on this for the past six months or so. Time ticks on....

We'll see if it pans out as I've been suggested it may by somebody placed rather high up in the company.

[shortbread]

I'm not qualified to offer financial advice but I would be doing exactly as you describe under the same circumstances.

Recent articles have highlighted how much Aberdeen house price inflation has outstripped the rest of the country over the past 10 years and this must mainly/wholly be due to the booming oil industry. Now that the boom is over and a serious recession has started to kick in it would be illogical to expect house prices to continue at their current levels. I am surprised a crash didn't happen months ago but people must be hanging on hoping/praying for a turn around in the fortunes of local economy. There is a 'ratchet' effect in house price movements which allows prices to move freely in an upward direction but which prevents them from falling as readily. People are conditioned to expect that negative equity will be eliminated by sitting tight until things pick up. I can't see this happening in Aberdeen. As I've mentioned before I can remember the boom times of the 80's and the years of stagnation which followed, when it seemed that houses would not sell at any price. In the late 80's I had a nice one bedroom flat which was one half of a granite terraced house in a prime location. In 1988 the two bedroom flat downstairs was put up for sale for £26k but there was no interest for months. I considered trying to extend my mortgage to buy it with a view to reinstating it to a three bedroom terraced house but the prevailing opinion was that it would not be worth it as the whole house would be worth less than the combined value of the individual flats [< £50k]. Even allowing for inflation this would equate to less than £125k for a traditional granite terraced house in the west-end of the city. I'm not suggesting house prices will fall by that much as circumstances are different (interest rates, availability of credit, confidence levels etc) but having witnessed a serious and prolonged crash in Aberdeen before I find a repetition far more credible than many of the 'latest have it all' generation might.

On the subject of Aberdeen and the oil industry - I was trying to think of another city/region of the UK which has more 'eggs in one basket' than Aberdeen. Many other areas, like Wales and the steel industry, have a heavy reliance on a single industry but nothing like to the same degree. Can anyone think of another area so heavily reliant on one industry or is Aberdeen(shire) a unique case??

Interesting read about the 80s crash.

I don't think there is a similar market like Aberdeen anywhere else in the U.K. yes there are cities and towns that are reliant on one industry.

But the difference is that the working class within the Oil and Gas industry are affluent. 40k+ wages, perks, offshore rates, contractors etc...etc....meant that the disposable income in Aberdeen was much higher than other cities or industries. I addition being farther up-north than other major cities, Aberdeen wages were at a premium even among other service sectors.

What I feel is that no other city saw hose prices and demand shoot up the way it did like in Aberdeen because of the oil money.

The bigger they are the harder they fall.

[sfr]

There are many in this exact situation.

Have always spent every penny, waited until the due date and cashed in that month and the month's previous contract wad.

You give HMRC a reason to audit... like failing to pay tax, you are going to get your collars felt.

HMRC can go back 20 years boys, and this 'test' on public sector PSC contract is just that. A testing/debugging phase.

The private sector loophole will close, that is a 100% sure bet.

Agreed.

A lot of the ltd co contractors don't understand the concept of trading while insolvent.

https://en.m.wikipedia.org/wiki/Trading_while_insolvent

No money in the kitty to pay Corp tax? VAT? PAYE? Etc

Then your trading while insolvent. HMRC takes a dim view...

All these boys keep thinking all that money is theirs. Spend the lot. Then scrabble about for the tax.

Not limited to O&G mind. A lot of contractors fall in this trap.

[Oily]

Interesting read about the 80s crash.

I don't think there is a similar market like Aberdeen anywhere else in the U.K. yes there are cities and towns that are reliant on one industry.

But the difference is that the working class within the Oil and Gas industry are affluent. 40k+ wages, perks, offshore rates, contractors etc...etc....meant that the disposable income in Aberdeen was much higher than other cities or industries. I addition being farther up-north than other major cities, Aberdeen wages were at a premium even among other service sectors.

What I feel is that no other city saw hose prices and demand shoot up the way it did like in Aberdeen because of the oil money.

The bigger they are the harder they fall.

Good point about earnings levels. I tend to think the Aberdeen situation is without recent precedent in the UK. With the exception of the public/ academic sector it is hard to think of a business sector that is not heavily reliant on the health of the oil industry. Farming perhaps but that is no longer a significant employer and it is certainly not a high wage sector. Ditto leisure/tourism/golf. Rowies?!

[Palangot]

people can just retrain as personal trainers then?

Or maybe estate agents.

We shouldn't joke, but the bigger they come the harder they fall.

[Alba]

Always interesting to hear about how things played out in the '80s, after the bust then.

Were there lots of empty properties then? And what was the situation regarding commercial property?

Don't have any info on commercial properties, but have direct experience of domestic property. Bought at peak just before the property crash, then sold in the trough shortly after.

The property slump lasted for about 10 years. Substantial West End properties remained unsold despite significant reductions. Whole streets in BOD were absolutely unsaleable eg Jesmond Drive etc. Not so much empty properties, just the unsold and unsaleable.

[reverand_cat]

Don't have any info on commercial properties, but have direct experience of domestic property. Bought at peak just before the property crash, then sold in the trough shortly after.

The property slump lasted for about 10 years. Substantial West End properties remained unsold despite significant reductions. Whole streets in BOD were absolutely unsaleable eg Jesmond Drive etc. Not so much empty properties, just the unsold and unsaleable.

Lots of BOD properties would have been new builds at tail end of 80s right?

Was Jesmond Drive newer builds?

It is interesting because I can see similar happening to a lot of new builds of recent in Aberdeen e.g around Mugiemoss road. I can imagine they will be very hard to shift when we get to the depths of this crisis.

[quine]

"Quick sale wanted" (and obviously written by a 12 year old who also has their photograph appear in the schedule)

"Offered for Quick sale 2 bedrooms flat on second floor with owner and visitor parking at the rear. The flat would suite a young couple or a small family very well. All fittings furniture sofa and kitchen appliances are in good working condition and include in the asking price. The flat is benefitted with dbg central electrical heating enter com and security entry system. It has giant mirrored storage in the laminated hallway. All rooms and living room are carpeted just a year ago and maintained very well. Ready to move into condition. A married couple has been living there on periodic terms for last 12 months paying monthly rent £800 excluding utility. The flat also would be available vacant if new owner wishes to . There are only two flats in this small building"

Read more at http://www.zoopla.co.uk/for-sale/details/39943602#Pj1BKGcxIyyAQDRk.99

[Palangot]

£800 a month or £10,000 a year for a house with sloping walls/roof.

The area looks rough as hell and I would have thought that if it isn't rented out to housing benefits winners, students would look to rent it.

Price of £600 would maybe be generous.

Fixed price at £120,000 seems high.

[cashinmattress]

Don't have any info on commercial properties,

These guys do.

http://content.knightfrank.com/research/163/documents/en/2016-3613.pdf

The collapse in oil prices has been devastating, resulting in major oil occupiers reversing expansionary strategies and retrenching.

This has led to a sharp fall in new demand for office space leaving a significant amount of vacant space overhanging the market. Notably, more than 50% of take-up, and the largest transactions of 2015 were “out of town” pre-lets agreed prior to the fall in oil prices.

With demand falling sharply, availability increased to 1.83m sq ft in 2015, the highest recorded level.

Significantly, the level of available Grade A space had risen seven-fold to 526,000 sq ft by the end of 2015.

There was however, a notable absence of secondary investment stock being brought to the market.

Vendors were fearful of receiving little or no interest as investors monitored the fast-changing occupational market.

In line with the market as a whole, buying activity for private investors was also limited and selective.

With many local investors having close affiliations with the oil and gas market, it was unsurprising to see their interest in Aberdeen ‘cool’ and in some cases divert to the improving central belt markets.

Aberdeen commercial property marketplace... tulip, too late?

Run, don't walk?

[Oily]

"Quick sale wanted" (and obviously written by a 12 year old who also has their photograph appear in the schedule)

"Offered for Quick sale 2 bedrooms flat on second floor with owner and visitor parking at the rear. The flat would suite a young couple or a small family very well. All fittings furniture sofa and kitchen appliances are in good working condition and include in the asking price. The flat is benefitted with dbg central electrical heating enter com and security entry system. It has giant mirrored storage in the laminated hallway. All rooms and living room are carpeted just a year ago and maintained very well. Ready to move into condition. A married couple has been living there on periodic terms for last 12 months paying monthly rent £800 excluding utility. The flat also would be available vacant if new owner wishes to . There are only two flats in this small building"

Read more at http://www.zoopla.co.uk/for-sale/details/39943602#Pj1BKGcxIyyAQDRk.99

Possibly the grimmest set of photos I've ever seen.... now too depressed to get up - thanks!

[reverand_cat]

https://www.pressandjournal.co.uk/fp/lifestyle/home/849717/better-act-fast-bag-house-aberdeens-west-end/

So, if you act fast, you might just be able to move into Craigton Villa, 120 Craigton Road, a stunning four-bedroom period home close to Great Western Road, Aberdeen.

...

The house, which will be let unfurnished for £1,800 a month, has four bedrooms, two lounge areas, a dining room, kitchen and a family bathroom.

Better act fast guys!

Oh wait, does that mean I would have missed the £350 reduction in the space of a month of it not being let out??

If only I'd acted fast...

Let's see if anyone bites even at £1450pcm.

https://www.aspc.co.uk/search/property/340017/Craigton-Villa---120-Craigton-Road/Aberdeen/

[Palangot]

I took a slightly different way to work this morning to have a look at houses around the city.

My observations:

1 - I need sunglasses

2 - lots of houses for sale

3 - lots of big big cars outside new builds. (Does anyone buy a new build and an old car?)

4 - traffic very light. Maybe school holidays (no kids, I don't know when they are off but it's Easter right?)

5 - potholes everywhere (my 11 year old A4 gets scared around this time of year)

[reverand_cat]

Also to add, £1450pcm for that property again is ALMOST value.

It's a prime property, good location and detached 4 bed.

For perspective somebody buying a £300k house would be paying similar in mortgage payments to the rental on this property.

Imagine this property was valued at £300k??? The market would go insane.

Rentals are once again showing where the market is at.

[AD14]

They're still not including the garage with that, though.

[AD14]

Don't have any info on commercial properties, but have direct experience of domestic property. Bought at peak just before the property crash, then sold in the trough shortly after.

The property slump lasted for about 10 years. Substantial West End properties remained unsold despite significant reductions. Whole streets in BOD were absolutely unsaleable eg Jesmond Drive etc. Not so much empty properties, just the unsold and unsaleable.

Thanks for the reply. Makes sense about the BOD since in the late 80s a lot of it would have been new build.

[Palangot]

Very nice house - very "reasonable" price.

I know people who have rented 2-bed flats in Kepplestone for £1450 a month. So by comparison, it's not a bad change.

Still a lot of money to be spent renting - £20k a year including bills!

[abz]

Wow things are really starting turn now.

Its the average Joe that I feel sorry for, that has to sell their 3 bed new build to allow them to relocate for work. There are however plenty greedy & flash Billy Bigtimes getting brought back down to earth with a thud!

I'm glad we held off our purchase of a 4 bed place in Deeside, the three houses we were keen on this time last year are still on the market, two of which have gone fixed price and one has been reduced from 370k to 349k

[Diver Dan]

3 - lots of big big cars outside new builds. (Does anyone buy a new build and an old car?)

From my pizza delivering days: New house or flat + New car in the drive = Zero tip.

And this is from when the local economy had its afterburners on full reheat. I can only imagine that this has got worse recently.

Also, 3 flats in the Adelphi all up for sale at the same time today.

[ccc]

They're still not including the garage with that, though.

Full of their own stuff. I dislike this 'renting out instead' common practice.

Bit risky as well - if there is no inventory done - then how could they complain if there was stuff missing when they return to it ?

I am sure plenty folk can get themselves into places and back out again without a trace.

[Palangot]