Urban regeneration and office market sustainability: capturing private-sector investment

Abstract

Market sustainability, described as where a market has the capacity to sustain economically viable trading activities and cope with property cycles, is a pre-requisite for long-term economic stability and growth. This in turn is a pre-requisite for the fair and equitable funding of public services and facilities. However, market failure, necessitating state intervention and public funding for regeneration is the antithesis. In periods of austerity, such state intervention is not possible, and alternatives are needed to reverse market failure. One example is through local urban regeneration policies which seek to attract private-sector investment in regeneration activities. Examining the effectiveness of such policies in leading to market sustainability, this paper sets out a conceptual framework of the stages that can lead to market sustainability, subsequently operationalising the framework through the collection and analysis of primary data. Thus, new transaction-based rental indices are developed for two case study office sub-markets in the city of Manchester in the UK, enabling comparisons of market maturity, economic resilience and competitiveness for investment for a regeneration and an established sub-market. The paper concludes that the regeneration sub-market exhibits clear characteristics of market sustainability, offering evidence for the effective targeting of future government regeneration policies.