The latest instalment of our series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.
The supply, type and quality of available commercial space is a key variable in a city’s economy success, probably.
I say “probably”, because we don’t actually know for sure: nobody has bothered to check what commercial property is available in different cities, and whether there is really any difference between those that are vibrant and those that are struggling.
Until now – because those pioneers at the Centre for Cities (CfC) have done it again. In its new Building Blocks report, the think tank has analysed the composition of commercial space in UK cities, and charted how it varies between weak and strong economies.
It can sometimes be a bit tough to work out which way causality runs here: just as the property available will influence a city’s economic performance, so its economy will influence the local property market. But with that caveat out there, here’s what we learned.
1. City centres look very different from their suburbs
Hey look, some charts!
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These pie charts show the breakdown of different type of commercial property in city centres and their suburbs across the UK.
Retail and, especially, offices dominate the city centres, making up a combined 76 per cent of all commercial property – nearly three times as big a share as the 27 per cent in the suburbs. With warehousing and industrial facilities, the picture is revered: 62 per cent in the suburbs, compared to just 13 per cent in the centres.
You can see this trend in individual cities, too. Here’s the same data but this time only for Leicester:
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The centre is 67 per cent office or retail, and 16 per cent industry or warehouse. For the suburbs, those numbers are 20 per cent and 71 per cent.
In short: the centres get the offices, and the suburbs get the warehouses. This is no huge surprise, but it’s always nice to put numbers on your hunch.
2. Economically successful city centres have more offices
To demonstrate this, we first need to define what success looks like. Drawing on earlier CfC research, the report defines its terms thus:
Strong city centres have a higher than average share of jobs in exporting firms, and a higher than average share of these exporting jobs are high-skilled.
2. Weak city centres have a lower than average share of jobs in exporting firms, and a lower than average share of these are high-skilled.
Helpfully enough, there’s a graph. Basically, if you want your city to be rich, you want to be top right.
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So, that behind us, how do strong and weak centres differ? Basically, like this:
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Strong city centres have a nearly three times as big a share of their commercial space dedicated to offices (62 per cent, compared to 23 per cent in weak centres). They also have a far smaller share of commercial space dedicated to retail (43 per cent, compared to 18 per cent).
Once again, you can see this in individual cities. Here’s Leeds compared to Doncaster:
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3. Economically successful city centres don’t just have more offices: they have better ones, too
The report uses energy efficiency ratings as a proxy for building quality – on the grounds that newer, or more recently refurbished, buildings will get higher ratings.
Here are those ratings plotted against the share of a space accounted for by offices. The light green dots – representing strong city centres – tend to do well on both.
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4. Weak city centres have too many shops
“Weak city centres dominated by retail do not have enough demand to sustain all these shops,” the report says, “which is why so many lie empty.”
Here’s a map of cities showing vacancy rates:
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With a few exceptions – booming Warrington has loads of empty space; Liverpool, which is often seen as struggling, has hardly any – this looks a lot like the map of city economic performance we all know and love.
5. Higher skilled suburbs are more office-y and less warehouse-y than lower skilled ones
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Which is probably what you’d expect. (“Higher skilled” here means “more jobs in high-skilled sectors”.) But the differences are relatively minor: there’s less variation in suburbs than there is in city centres.
That said, there are very striking differences between the suburbs of individual cities. Here are York and Northampton:
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The share of Northampton given over to warehouses is 18 times that of York. Whoa.
6. Suburbs often have better offices, too
Last one, but it’s a strange one. Check out the quality of office space in different types of city and their suburbs:
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The weaker the city centre, the more likely it is to have poor quality offices – and the greater the gap with its suburbs.
This is strange, at first glance. But it probably reflects the difficulty of attracting property investment in certain cities – and perhaps also a tendency, by weaker cities, to invest in out of town office parks.
I’m going to stop there. But if you want to know more, you can download the full Building Blocks report here.
Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.
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