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Mixed-use developments – are these the future?

Q1 2016

With the rise in mixed-use developments from iconic city centre schemes like the Shard to new out-of-town developments across the country, Rob Williams, Head of Retail Agency and Development, takes a closer look at this growing trend.

With a competitive development market, especially within the M25, and the demand for housing rising, many developers have turned to mixed-use as a way to not only get planning permission for a large number homes but to also add value to them.

The residential aspect in many mixed-use developments is the biggest value driver. Get the right mix of retail and restaurant within a development and you can boost the residential values.

Also, retail-only developments in town centres are challenging and there just aren’t that many on site this year. Adding restaurants and leisure help create the right environment.

What to expect

While mixed-use traditionally meant residential above with retail on the ground floor, the term is now much more diverse. It could be a retail-led development with attached residential, or an office tower with leisure facilities.

In fact, the definition of each of these categories is becoming broader. Leisure doesn’t just mean bowling alley and cinema – it can mean a boating lake or cycle paths. Restaurants aren’t just fast-food joints, but street markets like in the Trinity Leeds shopping centre, or high-end dining such as Duck and Waffle in the Heron building.

And while previously cinemas were happy to be located alone, these days they’re looking at sites with restaurants nearby, as much as restaurants look for leisure facilities as they now feed off each other.

While it was popular for a while to include doctors’ surgeries, drop-in centres and other community facilities, these tend to be found solely in council-led developments now, such as the York community stadium that includes retail, a community hub and pool.

But there is a rise in high-end mixed-use developments, whether it’s the Shard’s 5-star hotel, exclusive apartments and world-class restaurants, or the Battersea Power Station redevelopment, which includes an events venue along with a new hotel with rooftop pool.

Change in shopping habits

The desire for such developments comes not just from trying to get housing built but also from a change in shopping habits. Less and less are people going to the town centre to browse – it’s becoming more popular to research what you want online and find a place nearby that sells it.

And as more people go online, retailers are looking at ways to attract young shoppers to their stores. Mixed-use developments can do this, providing quality dining, entertainment, easy access and weatherproof shopping.

Offices in mixed-use developments are also popular with Millennials who put collaboration and interaction at the top of their list. This means flexible working spaces, good Wi-Fi and communal spaces are key.

Design changes

Mixed-use development could bring up visions of huge blocks with flats, shops and offices all squeezed under one roof. But this couldn’t be further from the truth for new developments.

They’re adopting a more natural approach to design as they look to recreate high streets and public squares. Some developers have gone as far as to appoint different architects for each block of the development for more variety.

Unit sizes are also getting smaller and more adaptable to allow a mix of big chains and independent stores – just like on a real high street.

Will it affect town centres?

Mixed use developments can happen in both town centres and out of town locations. When they appear in the centre, they can offer a boost to surrounding areas offering a focal point for the area’s regeneration.

And while some have called large out-of-town mixed-use developments the death of town centres, from our experience it’s not necessarily true. Many of the retailers who come to these developments aren’t necessarily ones that would have chosen to open a town centre store.

So you get a mix of retailer and leisure options at both the mixed-use developments and within the town centres. Also, some have also included park and ride at the mixed-use development allowing shoppers to get the best of both worlds.