commercial property Reading must manage its success
Statistics on the UK’s largest urban areas cast Reading in a favourable light. But economic success brings challenges, says Andrew Carter, chief executive of Centre for Cities
Carter revealed the findings of Centre for Cities just-published annual flagship report, Cities Outlook 2018, at the Reading Real Estate Network (RREN)’s latest event.
“The challenge for Reading is managing the upside of its economic growth. Success means it is out of kilter in areas like house prices and congestion,” he told an audience of over 100 networkers at Reading’s recently re-opened Thames Lido.
RREN is hosted by real estate consultancy Lambert Smith Hampton and planning and design consultancy Barton Willmore, along with two new network partners – solicitor Field Seymour Parkes and NatWest bank.
Reading is one of 63 urban areas in the UK with a daytime population of more than 135,000 that are covered in the report. Carter explained that these towns and cities account for about 55% of the UK’s total population and two thirds of its economic activity.
Productivity and employment
“Reading has a great story to tell on productivity – third after London and Slough, and one of only 11 places with productivity rates above the national average,” said Carter.
A significant chunk of Reading’s productivity is down to its high ‘knowledge intensity’ level, with nearly a quarter of its employment activities having knowledge as the key input. “For ideas and innovation, Reading is second only to London,” Carter noted.
The town also has one of the UK’s highest employment rates and is ranked seventh in Cities Outlook 2018 on this measure. Around half its highly skilled
working age resident population has a degree or above. Workplace wages are high, second only to London and significantly higher than the national average.
Brexit and robotics
Carter outlined the challenges that accompany prosperity. Reading is one of the top 10 exporters in the ranking, mainly of services rather than goods. Around 40% of the town’s exports go to European Union countries. “This means that whatever form Brexit takes will raise some serious challenges,” said Carter.
“Services are much more substitutable than goods. Its easier to get them from local providers in your own country, so that’s an interesting question for Reading over the next decade,” he added.
Another potential challenge comes from automation. “However, our analysis of the risk of displacement shows that Reading has only about 15% of types of occupations that might be replaced by automation and robotics, which is a lower rate than many places,” explained Carter.
Inequality issues
The UK’s most success cities are also its most unequal and Reading is no exception. “The town is very unaffordable, particularly high house prices, and this could hold back growth and expansion of the local economy,” said Carter.
He went on to talk about the possible impacts of the Northern powerhouse, Midlands engine, and the Cambridge, Milton Keynes and Oxford arc. And he noted that the ‘metro mayors’ appointed
last year are drawing central government funding for their city regions. “This raises the question of a risk of devolution, with towns like Reading being ignored,” he said.
Reading v London
Carter was asked whether he thought that Reading risked becoming part of London, especially with fast transport links making the capital easier to reach.
“There’s an element of Reading’s economy that is inextricably linked to London, and that brings gains to the Thames Valley. But Reading is also a hub itself and not a dormitory of London. Politically and institutionally, they are not connected. But London doesn’t care much about Reading and the town is coming under pressure from things London is not doing, for example, building enough houses.”
Other discussion points the audience took away to chat about over lunch at the lido included whether or not the Thames Valley speaks with one voice, and if HS2 will be revolutionary – or a waste of money.
The RREN welcomes ideas via its LinkedIn page for topics to discuss at its next event.
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businessmag.co.uk
THE BUSINESS MAGAZINE – MARCH/APRIL 2018
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