What measures sixteen foot by eight foot and costs £20,000? The answer - a car parking space in Liverpool city centre.

And far from baulking at the price, young professionals are falling over themselves to snap them up. Such is the boom in city centre living that a car parking space is widely considered as the ultimate lifestyle accessory.

As indicators go it's about as good as you'll find in relation to the success of the UK's urban regeneration policies. Certainly, had you suggested in the 1980s that we would end up paying that much for a car parking space you would have earned some very odd looks.

Now, however, our major cities are re-establishing their positions as hubs of innovation, investment and enterprise and unemployment is at an historic low. There is still much to do to ensure that everyone has a fair and equal opportunity to participate in - and benefit from - the wealth creation process, but cohesive, thought-out urban regeneration strategies are beginning to pay real dividends.

Seemingly, the key lies in the power of the regional development agencies. The RDAs have been given more cash and flexibility to spend on regional priorities - an essential factor behind the successful development of brownfield sites, for example.

Remediating the land on these sites is often prohibitively expensive for private companies. And yet, the public agencies recognise that the regeneration of these areas creates wealth, activity and most importantly, jobs. The RDAs are now in a position to work with private developers to kick start this process and yield the knock-on benefits through the transformation of these land pockets.

The neglected South Liverpool docks area has seen just such a renaissance. Through significant investment by ourselves, we have created a thriving mixed-use scheme whose impact on surrounding land values has unlocked further investment by other parties. The whole area is now considered a residential hotspot and more schemes are expected over the coming years. None of this would have been possible without initial investment by the public sector.

Some interesting lessons have been learned during the last 20 years of urban regeneration. Most notable is the shift from physical regeneration, usually housing or offices, to a more holistic approach which includes a recognition of the need for social gains to deliver a more equitable spread of wealth.

This is the most elusive aspect of urban regeneration. While projects can be implemented to improve the physical state of an area, or at least attempt to reverse the decline, fully engaging a community which feels alienated from the mainstream and ignored by the powers that be is never easy.

But balancing the public good against the private gain needn't be an alien concept to private developers and investors.

Take our £300 million Masshouse development as an example. Masshouse is a key development project in Birmingham City Centre and an important element of the city council's plans to regenerate the Eastside district.
The 1.1 million sq ft scheme will create a major new mixed-use office, retail and residential destination and is set to become one of Birmingham's most exciting new quarters.

The urban renewal strategy behind this project is simple. Masshouse will reinforce Birmingham's position as a regional capital by extending the city region to Eastside. A 250,000 sq ft magistrates court, 500,000 sq ft of grade A office space and retail elements as well as 550 luxury apartments will add a vibrant new area to the city, encouraging national companies to become tenants in the area, with tourists and residents needed to stimulate economic regeneration.

Where once mixed-use buildings were seen by some as shaky investments, now they are seen as a credible solution to creating genuine 24-hour city regions. The resultant job creation, improved environment and enhanced image for Birmingham will do much to stem the loss of jobs from the city's manufacturing base

Interestingly - and Masshouse proves the point well - UK cities are more confident about their future and are willing to consider tall buildings as statements of their new-found civic pride. We've seen it in cities such as Birmingham, London, Manchester and Liverpool, but some still don't quite see the potential.

The whole tall building debate is an interesting one in so much as it will define those cities seeking to use architecture as a source of competitive advantage. Does that mean low-rise equals low ambition? The good burghers of certain northern cities would have you believe it, but I'm not entirely convinced. Some of the best new architecture in Liverpool, for example, is the sensitive restoration and imaginative new build going on in the historic Ropewalks area - with not a tower block in sight. The area benefits from high densities and massing, yet retains an intimacy and street-level interest you could never find in the canyons of Manhattan.

The mix of uses in the neighbourhood demonstrates that lessons have been learned from earlier programmes. There are fewer bars and their placement is more strategic, avoiding areas of higher density residential developments. Instead, homes are mixed more readily with offices and non-drink retail, bringing greater variety and a more harmonious mix. That approach is certainly more sustainable than the slapdash approach of the nineties and should lead to the creation of long-term residential communities in our city centres, commonplace on the continent.

Looking forward, you have to be confident about the place of Britain's cities in the UK economy. In re-establishing their role as engines for growth they are acting as a valuable counterweight to London and providing a regional resource which should underpin local wealth creation for many years to come. Now that really is what you call sustainable development.

David McLean is one of Britain's leading commercial and residential development and construction businesses with a turnover of circa of £250 million.