The new Use Class Order data tool shows that while industrial, warehouse, and certain sui generis and community uses have remained separate and therefore protected, most commercial property in city centres is now in the same ‘E’ commercial use class. Crucially, while the old Use Class Order created and reinforced divides between cities, the reforms put cities on a level playing field.
For instance, consider Middlesbrough and Reading. Under the previous framework, 56 per cent of commercial space in Reading’s city centre was classified as office, compared to 28 per cent in Middlesbrough’s city centre.
But under the new Use Class Order, 93-94 per cent of each city centre’s space is now in the ‘E’ commercial use class. All of this space can be used for retail or office purposes. Instead of having to navigate a tricky and unpredictable process before they can begin to turn excess retail space into the office (or other) space that cities need, developers can just immediately get started and crack on. This will especially reduce development risks and costs in cities with weaker property markets, which is a good thing.
But prosperous cities will benefit too, especially those that have far too much retail in their city centre. For instance, retail previously made up 50 per cent of Oxford’s city centre commercial space. After seeing the largest increase in high street vacancy rates during the pandemic of any city, high street shops in Oxford are already being turned into life-science research laboratories.
Cities need to embrace economic change, and Class E makes that easier
Work still needs to be done to take full advantage of the new ‘E’ commercial use class.
Developers will need to bring much of this space up to modern standards, as it has been vacant for long periods. Some cities, such as Birmingham and Nottingham, also still have considerable amounts of industrial space in their city centres; local leaders will have to balance the needs of that activity with changing demand for city centre office space. Article 4 directions may need to be issued in highly productive city centres to prevent valuable commercial space from being turned into housing. And in the long term, demand for high-quality city centre space will be highest in the cities which are best able to provide what its commercial occupiers need: a large, highly skilled local labour market and good urban mobility.
While we don’t yet know what the full impact of the new ‘E’ commercial use class will be, it does mean that the city centre of the near-future has the potential to be a dynamic, high-occupancy place that flexibly combines spaces devoted to retail, office, and food and leisure – a place that could look very different from its recent past.
The lookup used to identify properties as ‘E’ class was created by Centre for Cities and can be found here. Comments and feedback are welcome.