Who are the future city centres going to be for?

Alex McCulloch, Director at CACI, looks at how neighbourhood centres can adapt for a new way of living.

First published by CoStar on 22 September 2021

Beyond the devastating health implications across the world, the indirect fallout from Covid-19 (through various restrictions and enforced behaviour) has permanently altered the ways in which we interact with physical space – and city centres are built on providing an efficient environment as possible to provide that space.

Offices were designed to maximise occupancy. Ground floors were occupied with multiple grab & go operators to speed throughput and get you back to your desk with a ready-to-eat lunch. Pedestrian routes to stations were fast-flowing torrents where you dare not misstep.

In a post-Covid world, this all changes.

If people alter the way they engage with space, then that space will adapt. Because this is what cities do.  They rebuild, reshape and reconfigure. Consider how cities have suffered in the past – the Great Fire of London, the Lisbon or San Francisco earthquakes, Hiroshima – all wrought great damage and brought tragedy.  From the destruction, however, new, and often improved, cities emerged. Covid has not destroyed real estate but it is the cause for it to be transformed.

The future city will be different

Commuter footfall is a huge driver of city performance. In 2019, TfL estimated there were 27 million trips a day undertaken in London.  CACI mobile data shows in the last three weeks of March 2020, footfall in cities dropped by 86% and in transport interchanges it plunged by 92%.  The circa 40% who had jobs that allowed them to work from home did so, but the impact on commerce was stark. I remember riding through Central London in May 2020 and the stores were as they had been left in March, stocked with the last of the winter wardrobes, letters piled high in doorways.  It was eerie, and the impact on businesses dependent on commuters was substantial.  Pret being an example of a business having to pivot and rapidly adapt.

Prime space will only get better

When asked, almost all office workers believe they will continue some form of home working with most hoping for an average 2.8 days in the office.  Across London, the biggest office occupiers, who together have over 10 million sq ft of space, have all said their long-term policy will be a hybrid 2-to-3-day split. But crucially, they are all maintaining their city centre offices, highlighting these prime commercial hubs remain as essential as ever.

Employees will still come into the office and if anything, office space now needs to be more attractive and engaging than ever.  Businesses recruitment, for example, will rely on the quality of their office environments, the proximity to major transport interchanges, and the dynamism of the surrounding area. If anywhere were to suffer, it is secondary office locations that are less attractive for workers.  These will need to evolve to be more than just worker siloes.

The city will become more vibrant

Nonetheless, logic suggests in this scenario that if the future is people in the office three days and at home for two, then there will be a 40% decrease in commuter footfall and by implication spend. If we dig deeper, however, we see the importance of nuance as the role of the office has changed. We have spoken to over 6,000 people during this pandemic and can see how perceptions have shifted. People now regard the office as an essential place to network, to meet and greet colleagues, to build connections and engage.

This changes the internal spaces, but also transforms the wider built environment. Lunch becomes an opportunity to do all the above, not just eat at your desk while checking emails. The streetscape evolves with more sit-down restaurants, al fresco dining, outside seating and vibrant placemaking initiatives to increase dwell time. Combined with the efficiencies gained elsewhere in the week, people can invest more time in the city. The race to the train home falls away as people stay in town for a drink, work and shopping/browsing.  Afterall, for those of us that are parents, if you are at home with your family three days a week there is less pressure to race home for bedtime the other two days.

The future is with the kids

As a result, even though it is still early days, we have seen average worker spend already increase by 15% as people engage more.  While footfall is down, spend is up. And the people who are most keen to return are the younger, urban living groups that want to get back to the places they are used to spending time and money in, for both work and play.

For those aged 18-34 years old, the whole point of living in an expensive and often crowded city is to socialise, share ideas and visit new places. They are less risk averse and more open to change. It is this cohort that brings the vibrancy and freshness that make cities crucibles of culture and innovation, not the aging middle management commuter class who were charging to and from the train station five days a week, eyes buried in their phones.

This shifts cities to a younger demographic.  The older, more rural households who can afford to have the choice to be freed from the shackles of five days a week in the office may decide they do not want to live in such proximity to many people.

This is no bad thing. A younger, more vibrant city could be hugely beneficial from a productivity perspective. Younger people are often more dynamic, open minded and entrepreneurial – significantly boosting economic growth. This also anchors some of the considerable older commuter spend in the communities where they live, regenerating and enlivening suburbs and commuter towns that were otherwise moribund mid-week.

The pandemic has made it essential for places to galvanise their centres for the new way of living. Towns and cities are evolving, and fast. Locations across the UK will need help and space to rethink the purpose of their centres. The cities and high streets of the future need to become multi-purpose locations, combining retail and hospitality amenities with offices, residential, education, healthcare, cultural, environment, technology, communities and more.  We may go in less, but we will expect much more when we are there.