Open for business: Britain’s strongest city centres suggest the “High Street” is not dead

• Successful high streets are an outcome, not drivers, of successful city centre economies
• Policy must focus on making city centres more attractive places to do business, not just shop
• Need to attract “knowledge-based” businesses with a skilled workforce and flexible office-retail spaces

Centre for Cities, in partnership with George Capital, has mapped the cities with the strongest city centre economies in the UK, and identified their common features.

The report City Centres: Past, Present and Future found that focusing on the struggles of certain high streets ignores the success of well-performing city centres and misdiagnoses the core problem: insufficient footfall in city centres due to a lack of jobs.

Successful city centres feature fewer shops but are supported by ‘knowledge-based’ office jobs – such as those in marketing, finance and law. As online retailers draw customers away from traditional shops, well-paying jobs in knowledge-based industries create a consumer market for high street restaurants, bars and other leisure activities to thrive.

Several regional cities such as Manchester, Birmingham and Liverpool have performed well in the last two decades at growing their city centre workforces, laying the foundations for strong city centre economies

The report shows the main challenge for poorly performing high streets is not the internet. It is the lack of skilled workers and demand to make the shift away from retail and towards high-knowledge and leisure services.

City councils require extra support and funding from Government to develop and deliver strategies that shift city centres away from retail, and towards office-based jobs and leisure. Meanwhile, councils with strong city centres should ensure a continued pipeline of high-quality office space to sustain the demand for bars, restaurants and other leisure venues.

The report concludes that to support city centres, the Government should treat them as strategic infrastructure projects, similar to transport.

It makes three key recommendations. First, it calls upon the Chancellor allow city leaders to access to the National Productivity Investment Fund to invest in making city centres more attractive places for businesses and employees. Second, it urges the Government to offer all city centres exemptions from commercial-to-residential conversions to protect valuable office space. Finally, more investment in skills for cities’ residents is necessary to create the educated workforce that future city centres need to thrive.

London is among the cities with the fewest empty commercial units in their city centres. Looking outside the capital, strong regional cities such as Liverpool, Birmingham, Manchester and Reading also have fewer commercial unit vacancies in their city centres than average.

At the other end of the spectrum Newport, Bradford and Wigan have the most city centre vacancies. These struggling city centres share a common characteristic: too many cheap retail units and a lack of quality office space, restaurants, cafes and bars. Their overreliance on traditional retail means that they have struggled to compete with the popularity of online shopping.

Commenting on the findings, Centre for Cities Chief Executive Andrew Carter said:

“This research shows that it is not all doom and gloom on the high street, despite the headlines. However future city centres are likely to look very different to today. We must remember that a successful high street is the result, not the driver, of a successful city economy and take a more holistic approach to regenerating city centres – including allowing councils to access infrastructure funding as well as money set aside for high street regeneration.

“Instead of trying to replace failed shops with more retail, investors and policy makers should focus their strategies on making struggling city centres attractive places to do business and spend leisure time – not just to shop.”

Responding to the findings Ben Young, founding partner, George Capital added:

“Having successfully invested in regional city assets, our experience confirms the more nuanced picture for retail outlined by Centre for Cities.  We have seen that thriving regional cities have the right mix of commercial, residential, retail and leisure assets to meet the demand from high-growth businesses while creating attractive spaces where people want to live, work and shop.  The way these cities have developed delivers real value for investors and communities alike.  Looking to the future this report also supports our view that there are further untapped opportunities to invest in thriving regional cities, which is good for our investors and a positive statement about the urban economy outside of London.”

Ends

Notes to Editors

About Centre for Cities

• Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities.
• We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies.
• We do this through impartial research and knowledge exchange.
• For more information, please visit centreforcities.org/about

About George Capital

• George Capital believes good quality, mixed-use city centre assets will deliver long term value to investors and communities.
• George Capital’s property funds invest in and manage commercial real estate in key regional cities across the UK.

City Centres: Past, Present and Future methodology

• City centres are defined based on all the postcodes that fall within a circle from the pre-defined city centre point. The radius of the circle depends on the size of the residential population of a city and its size is as follows: London – radius of 2miles, large cities – radius of 0.8 miles, medium and small cities – radius of 0.5 miles.
• As ever, the definition used for cities is the primary urban area definition.
• For the purposes of this report, we group together retail, food and leisure properties in city centres to represent high street services. High street vacancy rates, therefore, refer to the share of retail, food or leisure properties in city centres which are empty.
• The source of data on high street vacancies is the Local Data Company (2017, 2018). Data on commercial property composition in cities is from the Valuation Office Agency (2018).