Mixed use property developments defined as multi-purpose destinations that integrate different uses will increasingly become popular in the future.
According to Heidi Franck, managing director of property asset management and quantity surveying company, Intigra, town planners are intent on putting a halt to further urban sprawl and are instead encouraging a more efficient use of existing buildings
These usually include residential, office, retail, hospitality, entertainment and medical elements in one structure, says Mark Souris, managing director of retail, commercial and industrial property management company, Periscopic.
Souris says being able to develop new and successful shopping centres in existing suburban areas is becoming more difficult.
“Similarly, growth in the rural market while still prevalent will soon begin to slow down as that market too becomes saturated.”
According to Heidi Franck, managing director of property asset management and quantity surveying company, Intigra, town planners are intent on putting a halt to further urban sprawl and are instead encouraging a more efficient use of existing buildings.
“This is particularly relevant in light of the fact that transport costs will continue to soar and that convenience will become even more highly rated by consumers.”
The solution is to convert existing buildings into mixed use developments, says Souris.
Obviously this does require an upfront investment in refurbishing a building, but depending on where the building is situated and the type of tenant mix you aim for, a mixed use centre can be a worthwhile investment, he says.
He explains that mixed use developments vary in nature and larger projects situated in thriving commercial nodes are generally successful.
Office parks in Woodmead include commercial, retail and medical facilities, which allow tenants easy access to these offerings.
Another example of successful offices is the Nelson Mandela Square in Sandton, Johannesburg which showcases the accomplishment of a mixed use centre, as they have a wider selection of retail space and a secure residential portfolio.
Montecasino in Fourways also offers a variety of uses in one structure such as entertainment, retail, hospitality and offices.
In order to be profitable and successful, mixed use developments must be aesthetically pleasing and well maintained, sufficient and secure parking needs to be considered and most importantly, the tenant mix must be correct, points out Souris.
The type of residential tenants the centre attracts will have a direct impact on the type of retail tenants who choose to set up shop in the centre.
Franck says the correct tenant mix is vital in order to create a sense of energy and space.
“Mixed use developments tend to attract cosmopolitan people who buy into a particular lifestyle where safety, security and convenience are highly rated,” says Franck.
Souris adds that considering the massive housing shortfall in South Africa there is little doubt that mixed use developments will become increasingly popular in South Africa in years to come.
