Central Business District

Central Business District (CBD) refers to the core of the urban area which contains intensive commercial land-use. It is the most important  area of the structure of a city. The tallest non-residential buildings of the city are located in CBD. It acts as a growth pole of the city where most of economic and corporate activities take place. There can be more than one CBDs in a city. CBD is internally differentiated by land-use.

Characteristics of Central Business District

  1. The CBD lies at the center of the city in terms of accessibility and transportation.
  2. Most of the corporate offices and shopping malls are situated in this zone.
  3. There is a lot of traffic congestion in CBD.
  4. The CBD contributes the largest share of revenue to the municipal corporation.
  5. The value of land in CBD is the highest.
  6. It draws business from all classes, ethnic and cultural groups.
  7. A blighted zone separates CBD from the rest of the city.

The above characteristics of CBD are not delimited sharply. However, there is a gradual diminution of these characteristics as we move away from the center. Hence, there is a zone which separates CBD from rest of city, rather than a definite boundary.

Internal Structure of the CBD

CBD is not a uniform spatial unit and has internal differentiations in land-use. There is an hierarchy of economic activities as we move outwards from the center of the CBD. These differentiations or internal structure is as following.

  • CBD contains a series of concentric zones with each zone having a distinguishable land use.
  • The value of land declines from to center of CBD towards outer CBD. Hence, the rent is also highest at the center and diminishes outwards (Fig. 1).

    Fig. 1: Land Rent in a City
  • Therefore, the economic activities are also ordered, spatially. The firms which yield maximum profit can afford high rents. Thus, they are located near the center. Whereas, the the firms of lesser profits move outwards.
  • The large firms, shops and service providers enable many smaller businesses to operate in central CBD. They provide small space, water and electricity to these small businesses. These small businesses help the larger ones in many ways. First, they provide tea, breakfast, lunch etc. to employees of the larger firms at low prices. Second, they provide rent to larger businesses for using their space. Lastly, They attract low income customers to CBD. The existence of tea shops, snack shops and vendors in front of showrooms in Connaught Place in Delhi is a good example of this phenomenon (Fig. 2).

    Fig. 2: Connaught Place
  • The major transport routes terminate at the boundary of CBD. Therefore, you can see railway stations, bus stations etc. on the boundary of CBD. The presence of transport hubs in the outermost zone of CBD creates a special land-use. A lot of services crop up to serve the inbound and outbound passengers such as restaurants, shops, low-cost hotels, travel agencies etc. For instance, when you go to New Delhi Railway Station, you can observe that there is presence of a lot of travel agencies, hotels, restaurants etc.

Process of Blighting of CBD

In later stages of urban development, the CBD becomes very crowded due to extremely intensive land-use and traffic congestion. With time, the buildings and infrastructure becomes dilapidated. Therefore, many high income customers and large businesses start avoiding CBD for shopping and business purposes. The firms move their business to less crowded parts or periphery of the city. This leads to emergence of new CBD as explained in Multiple Nuclei Model by Harris and Ullman. This process of dilapidation of infrastructure of CBD is called blighting.


In short, CBD is the hearth of a city which propels its economic growth and attracts labor force from surrounding regions. It provides high end services, mostly but also provides some inferior services to the workers in CBD. Since, it attracts a lot of workers and customers, it becomes very crowded and blight over period of time. Therefore, municipalities take up the city redevelopment programmes.