Building Blocks

The role of commercial space in Local Industrial Strategies

What is the supply and nature of urban space within cities, and what does that mean for the industrial strategy?

Report published on 26 June 2018 by Anthony Breach and Rebecca McDonald

Not enough is known about the supply or nature of urban commercial space in the UK. This report examines — for the first time — the composition of commercial space in UK cities, and the implications this has for their economies as well as for Local Industrial Strategies.


The report shows the following:

  • In struggling city centres – defined as those with small shares of highly productive firms and jobs – retail accounts for twice as much space as offices (measured in m2), while offices account for less than a quarter of commercial space. In addition, the quality of this space lags behind that of more successful economies.
  • In contrast, successful city centres have more than three times more office space than retail, and the average quality of this office space is better than in other cities.
  • In suburbs, industrial land is dominant.
  • The quality of office space is often higher in the suburbs than in city centres.

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The report makes a number of recommendations on the role of commercial space – alongside wider interventions on skills and transport – in the upcoming Local Industrial Strategies that places are developing as part of Government efforts to boost productivity:

  • Struggling city centres need to reduce their reliance on retail, and instead focus on creating a better environment for other firms – especially exporting firms in sectors such as ICT, legal services, insurance and marketing, which are increasingly important for boosting productivity and wages. To do so, places need to focus on tackling skills gaps, improving transport infrastructure, and making more quality office space available.
  • These places should also focus on making their city centres better places to live, work and play in. For example, taking steps to repurpose surplus shops for amenities, housing, public space or parkland, will create a more attractive space for people to spend time or live in – which in turn will create more footfall for retail, restaurants and cafes.
  • Successful city centres need to manage the pressures of growth, and the squeeze on land and property it brings. That means taking tough decisions to sustain the growth in their economies by protecting commercial space in central areas, while ensuring adequate housing in built in other areas – for example, on suburban or green belt land.



Building blocks - the role of commercial space in Local Industrial Strategies PDF (5 MB)

This report was supported by Capita Real Estate and Infrastructure

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