Post Pandemic City 02: Challenge of Commercial Market & City Structure

Celebration of Commercialisation: Through the last 4 decades, Europe has undergone a shift from industrial to service economy. Cities with industrial legacy were left with urban voids. These urban voids / terrain-vagues transformed into commercial / mixed use spaces. Docklands turned into Business Parks, Industries into Shopping Malls, Industrial River Valleys into jogging friendly parks. Blue collar workers lost to a new growing army of white collar workers. And this transformation was presented by political leaders as an inevitable global change, celebrated by city planners and designers alike (!). A transformation of industrial land into consumer based commercial office districts.

While industry with its constraints, was heavy on land intake, the new commercial properties could go tall thereby enabling a significantly higher density of space as well as occupancy. This amplified the scale of daily surge and ebb of this white-collar workforce, converging towards the city centre.

“In Central London, we found that the City Core tops the rankings for space available and amenities. The City accounts for 54% of total office stock in London, which equates to about 123 million sq ft. There is currently a further 6.3 million sq ft under construction, roughly half the London pipeline.”

Source: https://www.knightfrank.co.uk/research/london-report/2020-02-05-getting-under-the-skin-of-londons-office-market, by Faisal Durrani, Feb 2020

A City Unshaped [i]: The city transformed to allow this daily surge through investments in transport networks. Retail could increase significantly with opportunities enabled by this convergence (footfall). This re-structuring of the city with its periphery commuting towards the centre for work and receding at the end of the day has structured our current infrastructure, retail that capitalizes off this footfall and work centres that bring about this convergence…the city centre and the suburbs.

Places to work and places to live. Zones dedicated to office districts and zones dedicated to secure residential neighbourhoods. Developers and city planners revelled in this clarity, economics of efficiency, building codes, financial models and all the specialisations based on something completely contrary to how cities need to be…definitely not Mono-use banal environments. With this clear separation between residential and commercial landuses, retail as a landuse turned into the torch bearer of “placemaking”.

The extent to which this logic of development and trajectory proliferated the city can be seen in the below figures from a slightly older but as relevant Property Industry Alliance 2017 report.

“The value of commercial property was ￡883 billion in 2016 representing 10% of the UK’s net wealth. Commercial property accounts for 13% of the value of all buildings in the UK. Over half of commercial property is rented, whereas only one third of homes are rented. Investors own ￡486 billion worth of commercial property with overseas investors now owning 29% of this total. Property accounts for ￡183 billion (almost 6%) of insurance company and pension fund investments. There has been a shift towards a more diverse range of lenders, away from the previously dominant UK banks and building societies whose share of outstanding loans is now 47% The commercial property industry directly contributes over ￡14 billion in taxes to the national Exchequer. Commercial property contributed ￡63 billion (3.7%) to the total UK economy in 2016. The commercial property industry employs over a million people – 1 in every 32 jobs in the UK. 45 million square feet of commercial property is built every year.”

Source: https://www.bpf.org.uk/sites/default/files/resources/PIA-Property-Data-Report-2017.PDF Publication by Property Industry Alliance 2017

The above shows the scale of challenges within London’s commercial market.

Remote Working:

Pre-Pandemic, there was a pre-existing trend of some office workers being able to opt for 1-2 day a week of remote working. Offices that were keen to reduce office space rental outgoing, were testing hot desking to efficiently capture worker absences to their advantage. Professionals with a much smaller consultant scale set up that required an office space only occasionally were looking at Hub offices with ability to rent. Organisations like “We Work” capitalised on this new demand.

Post-Covid, these trends in remote working and a case for downsizing became apparent. Offices where able to test and operate successfully completely online and virtual. Over time, numerous colleagues moved to various places dispersed across the globe (their homes) to work remotely. Here we are witnessing a unique condition where commercial space is getting fragmented and dispersed globally, into infinitesimally small cubicles, desks, rooms, mezzanines of people’s homes, garages, garden sheds across the globe…and this is just one organisation in one city.

The contradiction of being in a highly dispersed [ii] , highly networked economy where SERVICE and CAPITAL could move across globe in micro-seconds and yet its LABOUR had to commute daily physically towards the city centre was stark, and something that no office-planning strategy, no type and no contract could reconcile.

It has unfortunately taken a Pandemic to assert the obvious and also something that all those Smart City Visions[iii] had failed to capture or articulate. As elaborated earlier, there is significantly large wealth at stake with stakeholders invested in the status quo. How the design profession reacts / responds and mitigates this conflict will determine its relevance.

Disclaimer: The above ideas are my personal opinions and means to engage / contribute and possibly find venues for collaboration, also It reflects only my opinion and not of my current or any previous employers. I come in peace, etc.

In the following chapter (03) of this series of articles, I will be collaborating with Chris Cornelissen of DRMM to elaborate on potential solutions and new types that could mitigate this need for mixed use / live / work / produce and grow within the city.

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[i] A reference to Spiro Kostof’s A City Shaped. While the book explores the city as a "repository of cultural meaning" and an embodiment of the community it shelters, it does become increasingly difficult to witness city geographies that increasingly appear to be transforming towards universally devoid of meaning…like Canary Wharf.

[ii] “The digitizing of both services and trade shifts many economic transactions to electronic networks, where they can move instantaneously around the globe or within a country. Indeed, from the 1970s onward, there have been large-scale relocations of offices and factories to less congested and lower-cost areas than central cities, as well as the growth of computerized clerical work that could be located anywhere-in a clerical “factory" in the Bahamas or China or a home in a nearby suburb.” Saskia Sassen, Cities in a World Economy.

[iii] https://www.archdaily.com/576480/rem-koolhaas-asks-are-smart-cities-condemned-to-be-stupid