Spatial economic change and long-term urban office rental trends

The paper starts with the presumption that spatial economic change will have a strong influence on local long-term office rental trends. A number of hypotheses are developed which draw together the interaction between the office property market and these spatial economic forces, differentiating in particular by urban size and growth of.service employment. The subsequent statistical analyses test these hypotheses by applying an analysis of variance decomposition technique which distinguishes national and local components of rental growth rates in 30 office centres in the UK. The results are then considered within both a formal framework of an a priori typology of urban centres and alternatively through an agnostic set of centre clusters. The empirical evidence demonstrates the importance of national economic influences and that office property development does not anticipate growth even in expanding areas which, in turn, may be influenced by conservative planning controls in the UK. Abstracting the national influence creates a long-term diversity of local rental trends dependent less on the changed spatial pattern of demand and probably more on the nature of local property constraints. These constraints aret not purely physical as it appears that the development industry is more responsive in certain areas, notably the South East and East. The implication is that spatial economic change has been influenced by planning policies, property market processes and development constraints. © 2004 Regional Studies Association.