With urban areas becoming increasingly space constrained, and developers ever more keen to diversify income streams, mixed use developments are fast becoming the hottest property around. Empty-nesters and millennials are particular advocates, enjoying the proximity to shops, restaurants and offices.
As with the regeneration of London’s King’s Cross, for example, retail and F&B can be used to activate the street level space and maximise rental income, with office and residential land uses above. The possibilities are evident at Istanbul’s vast Zorlu Center, which combines a shopping mall with a hotel, offices and residential units, along with a performing arts facility. Brookfield Place, in New York City’s financial district, is a well-executed complex with premium retail, an innovative food court concept, special events and a large amount of prime office floorspace.
The variety of mixed-use developments means that many different types of consumers are attracted to them: those who want to shop, those who want to eat, those who want to be entertained, and those who live and work there. This in itself brings its own unique challenges and we recommend examining the following three factors when considering whether to invest in, or occupy, a mixed-use development:
It is important that different consumer segments are complementary and brand-reinforcing. Tenants should be combined in such a way that consistency is achieved – largely through self-selection. Premium retail, for example, can be used to ensure that visitors, and the resultant atmosphere, is conducive to the corporate environment desired by large financial services firms.
Think across the day-parts
One of the defining features of mixed-use developments is their usage across the day. Shoppers in the daytime; workers at lunchtime; residents and diners in the evening. It should thus be ensured that flexibility is provided in such a way that consumer needs and requirements are met at the right times. F&B outlets can adjust their offering and positioning to cater for workers at lunchtimes, with grab & go, and diners in the evening, with sit-down options (e.g. Leon). Retailers also need to consider how their ranges cater for the different customer segments across the day.
A sense of place
Whether retail, F&B, office or residential, a development-wide proposition should be created and reinforced. Consumers may use the development from a number of different standpoints – as both workers and shoppers, for example – and in their eyes the proposition must make sense across the board. The focus should be on placemaking, through the cohesive – rather than separate – planning of the different land uses. Tenants need to consider how well their brand fits into this environment before deciding to take space.