Transaction volume growth in non-CBD offices grew 255% across the EMEA region in the 10 years to 2018, compared to 174% for CBD offices, according to Cushman data, with non-CBD investments exceeding CBD in 2016 and continues to grow, while CBD volumes are slowing.
Andrew Phipps Head of EMEA Research & Insight, at Cushman & Wakefield explains:
“In early urban geographical models, the modern city was represented by a clear distinction between centre and periphery from a functional point of view. Cultural and political preferences, religion, economic relations and production techniques have contributed to a former distinction between the different functions of a city. This has resulted in previously fragmented cities, with monofunctional areas, based on the land values and transportation hubs. As such, in the post-industrial era, CBDs have emerged in most of the developed cities, in the heart of the city, where land values were the most expensive.
“Modern cities present a relatively spread landscape, with a strong (though ageing) CBD and diverse secondary office districts going towards the periphery. This has offered more opportunities in terms of a wider rental spectrum and new opportunities for developers. However, it has also contributed to congestion, higher vacancy rates in some areas, an unplanned feel to the overarching environment and increased challenges in attracting talented employees.
“Whilst the statement it’s ‘all about location’ remains key there are questions to be asked around the relativity this has to the expectations of a new workforce. This new workforce group seeks for an alternative work-life balance, now possible with new and remote technologies, collaboration and new ways of moving.
“As such, the old and traditional location of functions can be challenged. In an increasingly complex world, where the war of talent is becoming key, there is a need for designing new strategies to approach the location of the office function and to reimagine the future city.
“CBDs will continue to remain important as a central hub supporting decentralised activity, accelerating the trend towards developments with a high proportion of meeting and collaboration space. Workers will increasingly travel into the CBD for activities that require social interaction, team-working and face-to-face meetings – while potentially working locally in serviced office space, at home, or remotely.”