In the world of convergence where telephony, internet, and videos are converging, even the real estate sector is going through a similar metamorphosis. Increasingly, the urban customers of today are emphasising on a better quality of life and demand more of the city and the developments. In high density urban areas world over, high rise mixed use developments are increasingly being sought after. Here, we briefly explore this urban real estate phenomenon.
Mixed-use properties are developments may be single buildings or a substantially large urban or suburban community that combine residential, commercial, cultural or industrial usage within a relatively small and dense area. People who live and work in these developments enjoy easy access to a wide range of amenities as, retail stores, restaurants, multifamily housing, entertainment, etc. that in turn result in a better quality of urban life.
And this quality of life enhancement is brought about by a large saving in quality time that is available for social interactions with the family and friends. Such savings in time also, additionally, leads to higher productivity levels increasing the earnings on one hand and lower expenses in travel and transport on the other. Various estimates indicate that these translate into higher percentages of disposable incomes from 8% to 17% of household incomes for such families compared with those living in stand-alone residential apartments. There was a recent study that concluded after examining New York and Mumbai that these two cities showcase an emerging urban design lesson: Sprawling cities decrease quality of life; compact, mixed-use developments yield economic and social benefits.
If the people want quality of life and higher disposable incomes and they understand that the mixed use developments can offer that, the demand and therefore, rentals of apartments are higher as is evidenced worldwide. And this leads to one of the reasons as to why apartments in Mixed use developments are being more sought after by real estate investors who are always looking for investment opportunities in apartments that not only offer high rents but also high occupancies. Investors also love the fact that apartments in mixed use developments are marginally less expensive per square foot for the same specifications. This is because the bulk of the infrastructure costs are shared between various asset classes as retail and hotel, whereas all of such infrastructure costs such as external development, parking areas, common facilities and amenities, etc would have been completely passed on to the apartment owner / investor. The other asset classes too enjoy a similar relief on costs of the infrastructure too – an economic win-win all around.
For densely planned urban cities as Colombo, tall mixed use developments are, therefore, particularly exciting from all perspectives. There are studies that enunciate that the dependence on private cars has dropped by over 50% in precincts in New York where mixed use developments have been fostered. “Mixed-use projects also reduce ongoing costs to municipalities for services like police, fire and trash. Smart Growth America estimates the average savings at almost 10 percent.” Cities embracing mixed use developments have reported dramatic reductions in infrastructure costs as also reductions in green house gasses resulting in such cities being more efficient economically and greener. Tall, high density mixed use developments are the preferred option for residents, investors and the city.