Edited by Ben Derudder, Michael Hoyler, Peter J. Taylor and Frank Witlox
Chapter 15: Global Cities, Office Markets and Capital Flows
Colin Lizieri INTRODUCTION This chapter examines office markets in global cities and, in particular, international financial centres. The early world city literature focused on classification (Friedmann, 1986) or on a small number of global cities and on inequalities within them (Sassen, 1991). More recent work focuses on linkages between cities, drawing on theoretical approaches such as Castells’ (1996) ‘Space of Flows’. Empirical work in this tradition is exemplified by the Globalization and World Cities (GaWC) research network, which explores the connections between cities (e.g. Taylor, 2005). Those connections relate to exchange of information and human capital within and across firms and establishment of trust relationships, emphasizing knowledge creation and processing and advanced producer services (Hall and Pain, 2006; Cook et al., 2007). While the emphasis on flows and relationships is critical, the bulk of the activities that form these linkages takes place in offices – indeed much of the GaWC connectivity measures rely on identification of the office networks of high order service firms. Offices, by their fixity, ground flows in particular locations. They are not simply passive receivers and transmitters: office markets shape cities, direct firms to particular locations and create path dependency (in that a critical mass of office stock creates the breadth of business activities that drive agglomeration economies). Further, they are an investment asset, a store of value and a significant part of institutional and private investment portfolios. As assets, they act as collateral for bank lending and real estate securities. Thus they link global cities to...
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