_Top takeaways from our UK Cities' changing DNA: a regional perspective

Graham opened the discussion by sharing his personal connection to the topic, emphasising that as someone who lives and works in a UK city, he brings an authentic, on-the-ground perspective. His insights come from direct experience within the regional commercial real estate sector, particularly in the context of growing cities like Leeds.  

Graham highlighted that the major UK cities contribute 61% to the national economy, underscoring the vast opportunities available in the real estate market. Cities like Leeds have seen significant changes in population and dynamics, reshaping how real estate is developed and utilised. Graham highlighted Leeds's evolution from a city that struggled to retain talent to now a thriving hub that offers competitive amenities and accommodation for young professionals.  

A key factor in this transformation is the recent development of high-quality Private Rented Sector (PRS) properties, which were lacking in previous decades. Over 10,000 PRS beds have been completed or are under construction since 2020, allowing Leeds to retain graduates from its universities and meet the needs of the younger generation. This shift is part of a broader trend affecting many UK cities. 

Educational and corporate contributions 

Graham also noted the growing role of education in shaping the DNA of regional cities. In Leeds, collaboration between higher education institutions and businesses has been instrumental in aligning courses with industry needs, helping to foster a more skilled workforce. This focus on education is crucial for cities like Leeds, where the economy is transitioning towards sectors like Information and Communications, a change expected to take full effect by 2050. 

This pattern is visible in other cities as well. For example, Manchester has emerged as a leader in the digital and creative industries, with MediaCity now serving as a base for the BBC, ITV, and a burgeoning tech startup ecosystem. Such developments highlight the importance of capitalising on local strengths and driving proactive growth within real estate markets. 

Repurposing commercial real estate: challenges and opportunities 

Graham stressed the need for real estate professionals to adopt a forward-thinking approach. Many assets, particularly large city-centre office spaces, have remained unchanged for years and in some cases, decades. As the needs of cities evolve, so too must the properties within them. This is not just about capitalising on growth areas but also about value retention.  
Managing and repurposing existing assets is complex. Even buildings that appear modern may not be fit for sale due to unforeseen issues such as cladding and environmental, social, and governance (ESG) considerations. These factors have become increasingly significant, with no clear rulebook to guide investors. It’s important to get ahead of these issues and proactively address potential challenges to avoid delays and pricing impacts. 
 
Understanding the DNA of UK cities is important to unlock opportunities within real estate portfolios. By recognising each city's unique characteristics and growth trajectories, investors and developers can make smarter decisions and harness the full potential of the evolving urban landscape. 

Mapping the DNA of UK cities 

Stephen posed several key questions: What defines our towns and cities? What makes them unique? And, crucially, how can the real estate market support and drive these genetic patterns? 

Stephen explained that each UK city has a distinct starting point in terms of its economic history, current composition, and future direction. For example, while some cities may grow rapidly in technology-driven industries, others may find their strength in education or creative sectors. This means that not all cities will develop at the same pace or follow the same industry pathways. 

The real estate market needs to align with these patterns of change, adapting and evolving alongside the cities themselves. Stephen noted that this constant evolution presents both opportunities and challenges. Understanding a city's specific DNA is crucial for real estate professionals looking to anticipate its changing needs and unlock future value. 

Regional economic significance  

Stephen highlighted the major regional UK cities are vital economic drivers, with Greater Manchester generating a GVA of approximately £90 billion and Birmingham around £85 billion. The UK also remains the top global destination for inbound capital, and notably, this investment is not limited to London. Over the past 3 years, 60% of inbound capital has flowed into regional markets, a significant increase from the 40% seen in the pre-pandemic years. 

Aligning commercial real estate with urban evolution 

By focusing on proactive strategies and recognising the distinct characteristics of different regions, the commercial real estate sector can better align itself with the changing demands of these urban environments. 
The discussion underscored the need for continued collaboration between businesses, educational institutions, and property developers to ensure that the real estate market not only reflects the changing landscape but actively drives growth and innovation. For clients and stakeholders, this means being prepared to adapt, invest wisely, and uncover the potential within their portfolios by staying ahead of the changing DNA of UK cities. 

Explore our latest UK Cities DNA research 

Our UK Cities DNA research highlights what is currently impacting commercial real estate across the UK to provide a regional perspective that explores asset repositioning and other factors. 

How can we support you?  

We work holistically across consultancy teams to help our clients maximise their asset performance. Get in touch to find out how we can help.