Urban Business Districts Are Rebounding But Face New Challenges

Global business districts have shed their pandemic pain and are stronger than ever, but they need to evolve to retain their dominance, according to an EY-Urban Land Institute report released Thursday.

More than 60% of the 250 global real estate professionals surveyed said these districts are more desirable than before the pandemic. 

“Contrary to predictions of their decline, global business districts have adapted and recovered,” Simon Chinn, vice president of research and advisory services for ULI, said in a press release. “They remain the nerve centres of economic influence, yet their role is evolving.” 

The report looks at 30 business districts across 19 countries in North America, Europe and Asia. Combined, these areas contain 84 Fortune 500 Global headquarters and 296 headquarters, employ approximately 7 million professionals and generate $4.5T in annual GDP.

Topping the 2025 list of strongest business districts are Midtown New York, New York’s Financial District, Tokyo Marunouchi, La Défense in Paris, and the City of London. 

The report says these submarkets have long been the world’s premier business hubs, and while they retain their top ranking, slower property investment and rising vacancy are chipping away at their lead.

ULI and EY said four key megatrends will guide what successful business districts of the future will look like and highlighted some of the difficulties legacy districts could face. 

“Talent first” was the top concern when picking a location for 76% of real estate professionals surveyed. Successful districts will need to include a diversity of spaces such as residential, green spaces, mixed-use spaces, culture and leisure activities. This will be key to attracting the level of employee talent businesses are seeking. Districts without these amenities will struggle to secure initial business interest and retain existing occupants.

“Businesses are willing to pay a premium for quality and sustainability, but hybrid work means the definition of ‘prime’ has changed,” EY partner Marc Lhermitte said in the release. “Therefore flexibility, accessibility and a sense of place are now as critical as rent.”

Sufficient stock of affordable housing was a critical priority for 46% of executives.

Second, adaptable and modern spaces are taking precedence over prestigious addresses. This shows that businesses are starting to find more value in adaptable, affordable spaces over iconic buildings and locations. 

Third, companies are more attracted to areas that adapt to modern technology, including artificial intelligence, which could be key in closing the “unicorn gap.” Only 12% of privately held startups valued at more than $1B are headquartered in global business districts, opening the door for tech-heavy, innovative new hubs to climb the rankings.

Finally, sustainability is key to attracting businesses. More than half of the respondents cited low-carbon mobility as a decision factor, with building retrofits and green and blue infrastructure close behind. 

North American business districts face challenges from safety issues and a vacancy rate three times higher than in Asia.