GIS analysis on real estate values and economic activities . The City of Swindon ( UK )

1 The paper deals with the analysis of urban values and their spatial distribution in urban areas. We propose the use of GIS and spatial analytical techniques to model real estate prices and values in an urban area, producing different shapes and interpretations of an urban area. A test is done using real estate values available at unit postcode level for the City of Swindon (UK). INTRODUCTION Cities are privileged places hosting human activities and generally ‘dense’ in terms of functions, services, population (Clarke, as reported in Yeates and Gardner 1976), infrastructure (Alonso 1960), etc. located – or locatable in a given area and generally such density functions, as well as the urban land values (Knos 1962; Evans, 1985; Haggett 2001) decrease moving out from the centre. Scholars have been debating for decades on the shape of cities and the modals behind date, spanning from circular, concentric structures to more articulated radial or polycentric ones (Hoch and Waddel 1993; Waddel, Berry and Hoch 1993). To-date the existence of a central nucleus organizing the rest of the urban space is challenged by several centres developing from planning actions as well as different characters of places, deriving from the behaviours of a living and working population. In this paper we analyse the spatial distribution and structure of house prices, applying Geographical Information Systems (GIS) and spatial analytical techniques to highlight high value areas and promising expansion directions for the city. The scenario is referred to a pre-crisis situation, analysing the 2007 house price values. Such values are provided by the Land Registry and represent sales data collected on all residential housing transactions. The analysis is aimed at demonstrating the validity of GIS and spatial analytical techniques in analysing real estate data and to understand shapes and patterns in an urban environment. In the following paragraphs the study area of Swindon is introduced with a particular attention to the redevelopment plans and the ongoing actions that will possibly affect also the real estate market in the near future. The housing market in Swindon area is then introduced with reference to the *Studio Savino & partners **Dipartimento di Scienze Economiche, Aziendali, Matematiche e Statistiche Sezione di Geografia Economica Facoltà di Economia Università degli Studi di Trieste ***Università degli Studi di Trento 1 “Introduction”, “Point pattern analysis and urban values. Data and methods”, “Results and discussion”, and “Conclusions” were realized by Giuseppe Borruso. Andrea Porceddu realized the paragraph “The Study area. The city of Swindon (UK)” and Francesco Battaglia the paragraph “The real estate market in Swindon”. Where not differently specified, the elaborations have been done using Intergraph GeoMedia Professional and GeoMedia GRID 6.1 under the RRL agreement between Intergraph and the University of Trieste. GIS analysis on real estate values and economic activities. The City of Swindon (UK) *Francesco Battaglia! **Giuseppe Borruso!! ***!Andrea Porceddu!! 26 Francesco Battaglia · Giuseppe Borruso · Andrea Porceddu national, UK situation. We continue our analysis focusing our attention on GIS and spatial analytical techniques as tools for modelling urban prices and understand urban form. Geostatistics is used to model such features. Discussion and concluding remarks follow at the end of the paper. THE STUDY AREA. THE CITY OF SWINDON (UK) The city of Swindon is located in the Unitary Authority of the Borough of Swindon, in Wiltshire County in the South-Western region of England, at the centre of an ideal rectangle with Bristol, Gloucester, Winchester and Reading as vertexes. It is connected by important transport infrastructures as the M4 motorway, the A419/A417 to Gloucester and the A420 to Oxford, as well as the railways line connecting Bristol and London. The Borough of Swindon cover an area of 230 km2 and hosts a population of 201,800 people (2010 estimate) and the main centre is the large town of Swindon, laying on a narrower area of nearly 60 km2 and with a population around 156,000 inhabitants. Swindon appeared as a small market specialised in barter trade until the 19th Century when the industrial revolution invested the city. Canals’ constructions (Wilts and Berks in 1810 and North Wilts in 1819) increased accessibility trade opportunities, increasing also population and changing urban structure, while rail transport boosted the town, as in 1842 a new station for the Great Western Railway opened, with the function of shunting rail flows from London to a potential new rail connection to Gloucester. It was an opportunity to develop railways-based activities, and particularly rolling stock construction and maintenance that characterized Swindon economy for more than a century until the 60s of Twentieth Century – more than 14,500 employees were busy in rail – related activities – followed by a period of dismantling of the sector between the 70s and 1986. The economy changed radically, moving from an industry-oriented one to a service and hi-tech sector based one. Banking and financial services are leaders in terms of added values although manufacturing is still important. Nowadays Swindon economic environment is based on the automotive sectors (Honda, BMW and Renault have their plants there), ICT and electronics (Motorola, Dolby labs, Intel) and on insurance, finance and counselling (Nationwide, Zurich), Pharmaceutical companies (Patheon, Catalent Pharma Solutions). Such conversion is transforming the economy in a knowledge intensive sector. Skilled professionals in engineering, computing, biotechnologies and pharmaceutics are in fact needed in such economy. Also, the automotive sector has contributed creating an engineering cluster with suppliers and subcontractors serving it, as well as creating demand for logistic spaces, made possible also thanks to the good accessibility of the area. Logistics-oriented services concentration has allowed a further agglomeration of many retail and leisure activities, which have also been attracted by the new wave of urban regeneration’s plans in order to revamp local retail network2. Beside the Brunel Centre (with its 100 stores) and many other traditional retail areas like the ones in Old Town, retail supply is completed by two important and peculiar commercial centres (The Parade and Swindon Designer Outlet) and many peripheral retail parks (i.e., Greenbridge, Orbital and West Swindon District Centre). Prime retail rents in central areas show average values of GBP 185 per square feet, but outside the CBD the average value presents high decline levels, with rents level far below GBP 100 per square feet. In the pre-crisis period, Swindon economy registered good performances, growing of +3.1% per year in the 2002 – 2007 period (a higher rate than the average UK value) and with growing employment (+0.8% per year) (Office for National Statistics). Such activities and characteristics are contributing in transforming again Swindon economy, calling 2 The New Swindon Company identified 7 strategic development areas to strengthen retail and leisure services supply: Wharf Green, Canal Walk, The Parade, Regent Street (the main shopping high street), Bridge Street, Havelock Terrace and Wellington Street. 27 GIS analysis on real estate values and economic activities. The City of Swindon (UK) new inhabitants and making the city increase in its population – thanks also to the lower prices practiced here if compared to other locations in the UK and England. Such an increase is planned to be tackled by means of a new expansion of the town and a regenerating process involving the original town centre. A Regeneration Framework Plan for the town centre was set in 2002, originating the New Swindon Company (Now “Forward Swindon) to accomplish such a task, aimed at realizing a 1 Billion GBP investment to obtain space for new offices (nearly 1 million square feet), retail and leisure activities (more than 1 million square feet), homes (3,000 units). Such initiatives and the population growth in the area should benefit also the construction sector, both in terms of the realization of he Regeneration Framework Plan, aimed at creating new offices, services and residential accommodations. Research carried on by Real Estate Company Knight Frank foresaw in 2009 that the city’s expansion would head in the Southern part of the Borough, in an area included between the town and the M4 motorway with a horizon at 2026, although the economic recession slowed down also this project (Swindon Borough Council, 2009). THE REAL ESTATE MARKET IN UK AND SWINDON. The housing market in the UK is undergoing the effects of the global international financial crisis. After a period of growth (1996 – 2007) the average properties price fell steeply from the peak of the market in autumn 2007 (GBP 184,131.00 nominal average price) to the minimum of the first quarter of 2009 (GBP 149,709.00) (Graph 1). After that low peak, the average price raised at the end of 2009 (GBP 162,116) and, although some fluctuations in 2010 and 2011 occurred, house prices are stable at nearly the same level at the beginning of 2012 (GBP 162,116 at the end of Q1). A modest +1.1 % of growth was in fact registered in 2011, while London was the best performing region with a +5.4 % annual increase. Graph 1 Nominal and Real House Prices and trend in real house prices in the UK. £0 £20.000 £40.000 £60.000 £80.000 £100.000 £120.000 £140.000 £160.000 £180.000 £200.000 £220.000