World’s business districts regain strength but face ongoing challenges

The world’s major business districts are recovering their appeal after the disruption of Covid-19, according to new research from EY and the Urban Land Institute (ULI). The 2025 Global Business Districts Attractiveness Report shows that nearly two thirds of surveyed stakeholders now consider these districts more attractive than before the pandemic. The study assesses 30 leading districts across Europe, North America and Asia using 2,400 data points measuring macroeconomic performance, talent, real estate, innovation and sustainability. The findings suggest that long-established hubs retain their dominance, with Midtown Manhattan, the Financial District in New York, Tokyo Marunouchi, Paris La Défense (pictured) and the City of London occupying the top five positions. Collectively, the districts generate USD 4.5 trillion in annual GDP and provide more than seven million jobs.

While the report highlights renewed confidence, it also points to significant structural shifts. Vacancy levels remain elevated in many North American cities, particularly Los Angeles and San Francisco, where safety concerns and weak investment trends continue to hinder recovery. By contrast, Asian districts including Beijing, Singapore and Seoul are strengthening their positions, reflecting the region’s continued economic momentum.

European districts show mixed trajectories. The report notes that Europe’s six leading hubs host far fewer Global Fortune 500 headquarters than their Asian peers, and investment volumes have fallen sharply since 2020. However, European cities also lead in environmental transition, with Frankfurt and Amsterdam showing strong progress. Emerging districts in the Middle East and India are also gaining ground, including Dubai’s DIFC, Riyadh’s KAFD and Bangalore’s Outer Ring Road.

ULI’s Simon Chinn says that business districts have adapted and recovered, but must now balance commercial performance with climate responsibility and the need to support more human-focused, multifunctional environments. EY’s Marc Lhermitte adds that hybrid working continues to reshape demand patterns, with companies willing to pay a premium for sustainable, high-quality space as the definition of ‘prime’ evolves.

The report identifies four megatrends shaping future competitiveness: attracting talent, ensuring real estate represents fair value, addressing the shortfall in high-growth start-ups, and accelerating sustainability. Talent attraction is now the top priority for more than three quarters of executives, highlighting the importance of districts that offer strong transport connections, high-quality services, cultural amenities and more diverse uses. Mixed-use areas such as Paris La Défense and São Paulo’s Paulista Avenue illustrate how blending work, residential and leisure uses can strengthen appeal.

Technology is becoming integral to district performance, yet only a small proportion of high-growth start-ups are based within traditional business districts, raising concerns about their innovation capacity. Sustainability also remains a critical challenge, with fewer than one in ten executives believing current efforts are on track. Low-carbon mobility, retrofits and green infrastructure are identified as the most impactful priorities.

Looking ahead, the report argues that business districts will need to evolve into mixed-use ‘central social districts’, with a stronger emphasis on resilience, climate adaptation and the integration of work, living and culture. Recommendations include prioritising affordable housing, accelerating adaptive reuse, expanding digital infrastructure and fostering greater collaboration between business, academia and start-ups.