Mixed-use developments are breathing new life into the real estate sector and creating opportunities for innovative placemakers.
By 2050, almost 68% of the world’s population will live in urban areas . This means that cities today need to find smart solutions to maximise space and provide what residents need in the face of increased demand, as well as facilitate new business and leisure opportunities for the growing population. As urban areas become denser, mixed-use developments are a vital tool for creating desirable communities.
Understanding the mixed-use concept
We have lived in cities that planned around car ownership for so long that we have forgotten how unnatural single-function developments are. Office parks are built in one area, suburbs in another, and if you’re lucky some shops are placed down somewhere in between. Residential areas lay empty throughout the day, and offices are abandoned at night. This kind of thinking has resulted in average commute times climbing to more than an hour across Europe’s busiest cities, but there is an alternative.
Mixed-use developments where people can be productive, socialise, lay their heads down and shop will be crucial for creating the liveable cities of the future, which is why Europe’s most rapidly expanding cities are already championing the trend. For municipalities, the high-density nature of mixed-use means an increased tax base, less traffic congestion and a better community image.
Meanwhile, for residents, mixed-use offers a higher quality of life, a better sense of place and the convenience of live-work-play options in a single location. It fulfils people’s desire to be at the center of where everything is happening in cities. Businesses benefit too; more foot traffic means more sales, and closer proximity means the chance to cooperate with other local businesses and increase their community involvement.
For real estate developers, mixed-use developments offer an opportunity to really deliver projects that are embraced by local communities rather than resisted. There is also more income potential from mixed-use projects because they allow more leasable space, more sales per square foot, and higher property values and selling prices.
The end of single-use developments
The benefits of mixed-use developments have been plain to see for a long time, but support has been slow to build. In Europe, major projects like the HafenCity in Hamburg and Vauxhall Cross Island in London hope to remove the demarcations between different types of development and developer altogether. But each project has its own requirement and they don’t all achieve the same levels of success and support.
Take London’s Canary Wharf, for example, which celebrated its 30th anniversary earlier this year. Once the biggest urban regeneration project in Europe, this landmark development transformed a derelict, post-industrial wasteland into what is today the UK’s single largest employment hub. But despite its successes, Canary Wharf has found it difficult to shake a long-held reputation as a soulless and impenetrable corporate enclave.
The area has a daytime working population of 120,000 and it features 16 million ft² of office and retail space . At street level, Canary Wharf is a sterile monoculture compared to the hipster markets of Tower Hamlets and graffiti-drenched walls of Shoreditch nearby. After 5pm, the district’s offices empty and its shops close, leaving the place abandoned and lifeless — a problem the estate owner now has to address.
In June, the Canary Wharf Group announced its vision for how to breathe new life into the development by 2025: a £2bn scheme that will add more than 5 million ft² of real estate to the district with a new focus on residential accommodation . The aim is to create a mixed-use development that revitalises the area and turns it into a neighborhood that thrives around the clock, not just during trading hours.
Ideally, of course, real estate projects need to deliver this value from the start rather than leaving the place-building bit as an afterthought. So what are the keys to a successful mixed-use project?
Designing for good densification
Walkability and connectivity are invaluable. Nothing reduces the liveability of dense environments more than poor accessibility. By designing for pedestrians first, it’s possible to optimize land use to achieve more leasable space, more sales per square foot and higher overall property prices. But creating denser spaces requires a greater investment in forward-thinking design.
Areas that are effectively pedestrianized maximize the utility of space, improve sustainability and reduce the friction of spontaneous commercial transactions. In other words, facilitating people to pop across the street to buy a carton of milk at will, rather than having them wait to go to the supermarket for a full shop later on. Funny, memorable things happen when you’re crossing a street; things that make you want to come back to a place. Less so when you’re driving around in a car.
As urban populations continue to climb, there is an escalating need for increasing densities and making greater use of existing infrastructure. This has knock-on implications for urban mobility as more residents and workers are provided with convenient access to established transportation networks. The future of urban real estate will depend on embracing the opportunities to create spaces that people want to spend time in for a wide variety of reasons.
Turning areas into destinations
Shared space is a simple concept that can be surprisingly difficult to pull off. When designed correctly, shared spaces can serve as a memorable bridge between inter-related experiences. The transition between these spaces provides residents, as well as shoppers, office workers and other passersby, with a tangible sense of place. They turn an area into a destination.
At Zoku, we consider all of this when we plan a new space. We have introduced a seamless and flexible new category in the hospitality industry by combining the best of hotels, homes, coworking venues and community spaces in a single, attractive package — but that’s not all. Our first location, Zoku Amsterdam, also hosts several mutually beneficial tenants such as WeWork, a fitness studio and an independent cafe that brews some damn fine coffee.
What we see as a result is a thriving ecosystem where hotel guests, office workers and retail merchants feel connected to each other. This is not only great for Zoku and its residents, but for our diverse neighbors and their businesses too. Our goal is to bring our mixed-use model to 50 locations within the next 10 years as we begin our rollout across Europe and beyond. We’re actively seeking forward-thinking partners to join us on that journey — get in touch if you’re interested in talking.
- United Nations (2018) World Urbanization Prospects: The 2018 Revision
- Canary Wharf Group (2018) Local Impact Report: 30 Years of Canary Wharf
- Evening Standard (October 19, 2018) Canary Wharf banking on bright future with £2bn plan for Shoreditch-style shops