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Aberdeen is currently a city of change – a changing mood, a changing property market, a changing economic base and changing infrastructure.

It is undergoing a renaissance forced by the collapse in the oil and gas market which cost thousands of jobs, depressed the property market and pushed many businesses to the brink and some over the edge.

However, the stoicism and entrepreneurial spirit which is seemingly genetic in the north-east is ensuring that the future looks not only bright, but significantly different.

It was Abraham Lincoln who said: “In the middle of difficulty lies opportunity.” In the middle of the most difficult economic period for half a century Aberdeen is certainly grasping that opportunity.

Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, says: “North-east businesses of all shapes and sizes have had to adjust in recent years but our economy is one that is still the envy of many places in the UK. The region is a hive of activity and industry, punching above our weight in terms of business, innovation, quality of life, education and tourism.

“We also have a very strong platform from which to move forward. We have a clear economic diversification strategy, our strength in innovation is being further developed through City Region Deal investment, there is real momentum behind the city centre masterplan and most of all we are beginning to demonstrate confidence and ambition.

“New and innovative thinking is also being employed – such as the city council launching a bond issue to help finance future growth and investment – and there is a tremendous amount of investment in our infrastructure underway. Aberdeen is transforming itself into a modern, well connected city capable of supporting our future growth with almost £9bn of infrastructure projects either planned before 2030 or already underway in the region.

“The region’s cultural ambitions are a key element of our economic ones and this too is an area where we are seeing positive change. The wide range of existing festivals, attractions and activities which bring colour and vibrancy to the north-east are a vital part of what makes people want to live, work, study and visit here but we are certainly not yet the finished article.

“Organisations throughout the region are now working more closely together than ever before to agree and deliver our renaissance region vision and culture is a key part of this. The new ten-year Culture Aberdeen strategy will play a big part in continuing the city’s transformation into a cool and cultured place.”

Opportunity North East (ONE) is playing a unique role in accelerating growth and diversification in the region, to increase productivity, competitiveness andjobs. It is industry-led and privately funded with an investment commitment of £62m over ten years from the Wood Foundation. ONE works in partnership with the aim of co-investing to leverage a further £62m of match funding from the private and public sectors to deliver transformational programmes.

Jennifer Craw, chief executive, says: “ONE is focusing on the sector-specific opportunities to drive growth in the region in food, drink and agriculture; life sciences; oil, gas and energy; tourism; and digital and entrepreneurship.

“ONE is leading on the development and delivery of transformational innovation and tech hubs for digital and entrepreneurship; food, drink and agriculture; and life sciences and providing bespoke acceleration and scale-up support for high-growth potential businesses of all sizes across the key sectors with a focus on innovation and market development.”

She says digital transformation is a huge opportunity and ONE aims to build a strong cluster of industrial digital companies in the region and drive the uptake of digital solutions across key sectors to increase efficiency and productivity.

“The focus is to support new starts and existing businesses and to connect digital businesses to opportunities across the sectors.

“ONE also aims to build on the region’s global mindset by supporting businesses to focus on high value export markets where products and services command a premium, provide market-specific support to companies and use market insights to drive business innovation to increase the volume and value of exports from the region.”

Significantly improved tourism is a key part of the renaissance vision for a strong and diversified economy which is shared by the private and public sector. Chris Foy, chief executive of VisitAberdeenshire, says: “There are significant infrastructure developments on-going within the region which strengthen Aberdeen’s appeal to visitors from across the UK and from around the world.

“One such example is our new opportunity to benefit from the £72m cruise industry. The Nigg Bay harbour extension will allow large cruise ships to dock on the quayside in Aberdeen from 2020, significantly expanding our capacity to host more, and bigger cruise vessels.

“Elsewhere, Aberdeen City Council’s £333m investment in a new state-of-the-art convention centre will help broaden the appeal of the north-east and provide a world-class space for business and leisure events. This facility, combined with our 7,000 room accommodation capacity, positions Aberdeen as an attractive destination for event organisers. It means we can compete to attract high volume and high value conferences and exhibitions, especially those aligned to the areas of academic and industrial expertise that reside within the region.

“These are just two examples of how £8.9bn worth of investment committed to the Aberdeen region in the coming years will benefit the tourism sector. The projects are wide reaching and vary from the extension of Aberdeen Art Gallery to the expansion of Aberdeen International Airport and the completion of a new peripheral route ensuring the north-east is now better connected to the rest of the world than ever before.

“The combination of improved built infrastructure and the updated destination strategy for Aberdeen and Aberdeenshire, which sets out the framework to increase visitor spend to £1bn per annum by 2023, means as a visitor destination we have one of the strongest abilities to grow our economic contribution of anywhere else in Scotland.”

Jennifer Young, chairman and partner at Ledingham Chalmers says: “The Aberdeen market has recently been described as showing ‘determined optimism’ and that’s an accurate reflection of what we’re seeing.

“In no small part that re-stabilisation is down to the rise in the oil price, as well as an acclimatisation to the ‘new normal.’ As the sector has reformed and stabilised, we have seen client demands on the ground in Aberdeen grow.

“Diversification remains a business imperative for many. Recent stats show that something like 60 per cent investment into Aberdeen in 2017 was not in oil and gas. The City Region Deal and ambitious programmes driven by ONE in key industry sectors such as food and drink and agriculture, and digital and entrepreneurship are building real traction.”

Councillor Douglas Lumsden, co-leader of Aberdeen City Council, says: “The city has had to show the qualities synonymous with Aberdeen to meet the economic challenges of recent years: resilience and determination.

“As a council we have met those challenges head on and been very proactive in our approach, which centres around the regional economic strategy’s aims of diversification and internationalisation.

“One of the key areas of diversification is tourism and the council is investing tens of millions of pounds to bolster the cultural offering.”

The oil and gas downturn forced the Aberdeen business community to take a long hard look in the mirror which has led to greater diversification, with many businesses reinventing themselves and emerging leaner, meaner and hungry for growth, according to Richard Scott, partner at Pinsent Masons head of office in Aberdeen.

“I am encouraged by the work of the Oil & Gas Technology Centre (OGTC) and its TechX programme which is shaping a new generation of technology start-ups (who we are mentoring) and Opportunity North East which is championing diversification and supporting a regional renaissance.

“Aberdeen has been knocked to the canvas before, but it is a robust city which is getting back on its feet and the soon-to-be completed AWPR and Aberdeen Exhibition and Conference Centre, and the prospect of a new stadium for Aberdeen FC, are positive economic indicators which augur well for the city and region.”

Douglas Martin, head of corporate finance, AAB, believes innovation is key to unlocking the next wave of new investment in the industry and is encouraged by the projects being supported by the OGTC and the work AAB is doing with clients who are investing heavily in new technologies.

Continuing market stability and a rise in the oil price to nearly $80 has fuelled a more positive environment across the Granite City.

From recent discussions with clients, growth in the industry is also being driven on other fronts, most notably securing additional work in new geographies and new sectors outside of oil and gas including the defence, nuclear, marine and renewable energy sectors.

Martin says: “We continue to see a gradual uptake in M&A activity with more buyers and investors actively looking for investment opportunities and we expect this to trend to continue in the year ahead.”

Councillor Jenny Laing, co-leader of Aberdeen City Council and chair of the Aberdeen City Region Deal Joint Committee, says the deal is integral to the regional economic strategy, which recognises the importance of anchoring the oil and gas supply chain to the area.

“We want to ensure a vibrant long-term future as a global energy hub, whilst at the same time recognising the opportunities for greater diversification.

“Through the City Region Deal we have seen a number of exciting developments in the energy field come on stream in the past year. The OGTC is an excellent example of that – demonstrating the importance we place on innovation. Aberdeen has built its reputation as a global leader in the oil and gas sector. It is important we harness the vast expertise we have in the city and use that to push forward with a focus on new technology.”

Aberdeen property agents are feeling more optimistic than for several years, according to Richard Noble, managing director of FG Burnett. “On the offices side there are more requirements filtering through with a focus on grade A product like The Silver Fin Building, The Capitol and Marischal Square developments. The out of town market is also improving, particularly in Westhill. The challenge will be for the poorest offices whose future is uncertain and we will, in time, see redevelopment.

“The industrial sector is also seeing increased enquiry levels and it’s in this sector we may see a shortage of quality supply. Developers with their fingers on the pulse will benefit from that but at the moment the emphasis is still on flexibility in relation to rent and lease terms.

“The retail picture is aligned with the national picture where confidence is low, fuelled by the almost weekly talk of another CVA, a vehicle that was created to save businesses but which now feels like a way to reorganise a retailer’s portfolio, dumping poorer performing stores. It is becoming increasingly difficult for landlords to fill voids, particularly on the high street.”

Simpson Buglass, head of the Savills Aberdeen office agrees. He says there has been a steady improvement in the commercial and industrial markets but the challenge of a massive overhang of office space remains.

“The market still appears to be prepared to pay the top line rents for the likes of the Capitol, Marischal Square and the Silver Fin developments. However, the office buildings which are located in the industrial estates are perhaps going to struggle to find occupiers.”

A reflection of that is that last year Malcolm Allan Housebuilders decided it made economic sense to demolish an 18-year-old three storey office block in Dyce which had lain empty for seven months rather than pay the £110,000 annual rates bill.

Buglass says: “Over the last few years we have had a general trend for office occupiers to move away from cellular accommodation into flexible open plan accommodation and you simply can’t create flexible open plan accommodation in Victorian and Georgian townhouses which we have in Golden Square, Bon Accord Square, Bon Accord Crescent and the various terraces in the west end.

“So it seems likely that Aberdeen will end up following the trend of Glasgow, Edinburgh and cities further south where period townhouses change from office use to residential.

“Aberdeen must be the only city or town where a period building is not considered to be a trophy residence.

“We have had $70+ oil for the last while which has definitely been a fillip but on the other hand an unstable oil price is not necessarily a good thing. We need stability more than anything. The oil and gas industry has addressed its uplift costs and overheads and the signs are that the purse strings are being released and most of the companies we speak to, with some notable exceptions, have been recruiting.

“That has to be a good thing and overall the whole community seems to be in a more comfortable and optimistic frame of mind. That will ultimately translate into positive decisions being made about moving whether that is personally or in a business context.”