The Urban Tendency: The Increasing Appeal of City CentresMarch 2, 2014
A report published recently by Jones Lang LaSalle demonstrates the growing appeal of city centre locations for UK businesses. This is mainly driven by staff recruitment and retention issues – not just the ability to draw on a large potential labour pool, but also the importance of the amenities and character of an urban setting in supporting employee satisfaction. These factors are increasingly important in a knowledge-based economy in which more young people live in cities and fewer own cars.
There are, of course, other drivers. Planning regulations have meant that appropriate modern stock is most readily available in city centres. Some sustainability aspirations may be more easily met in such settings. It is, however, demographic and economic changes that are driving such shifts. The main growth sectors, such as professional services, media and technology, thrive in locations that maximise the opportunities for knowledge-sharing, networking and collaborative working. More often than not, these can be found in urban settings, and once established, these clusters benefit from agglomeration effects.
Meanwhile, the staggering rise in graduate numbers has produced a generation of young workers who have become used to urban or inner suburban settings, and do not want to move out of town. This has been bolstered by the UK’s more internationalised labour market; cities offer these globally mobile workers more opportunities for meeting compatriots or other like-minded individuals. Car ownership is in decline among the young workers that are so key to many companies, while new transport links are improving connections between city centres, enhancing the benefits of a central location.
A summary of factors that are supporting these trends are:
1. Demographics and Lifestyle: Young, skilled workers now tend to live in more central locations
2. Immigration and Globalisation: More international workforce drawn to cities
3. Working Practices: Rise of flexible and mobile working
4. Sustainability: Urban locations promote sustainable transport patterns and shared services
5. Policy: Government continues to restrict out-of-town development
6. Transport Improvements: New railway and tram lines