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What’s next for the mixed-use sector?

Article | 3min read

by JONES REAL ESTATE on February 21, 2023

Over the past decade, mixed-use projects have skyrocketed in popularity among developers eying new builds to become a mainstay in Melbourne’s metropolitan and inner-suburban infrastructure.

With the number of Melburnians now tipping over 5 million, and the city expected to become Australia’s most populated city by 2032 – driven partially by renters returning from ultra-competitive regional markets – mixed-use developments will continue to play an important role for future residents, workers and retailers across Victoria.

In this piece we’ll get under the hood of current and future mixed-use developments, why they could be a strong candidate for your new office space, as well as provide details on an exciting investment opportunity available through our experienced sales team.

What is a mixed-use development?

A mixed-use development is an integrated real estate project combining residential, commercial, hospitality, childcare and retail at one development. However, not all of these verticals need to be incorporated for the build to be referred to as mixed-use.

In broad strokes, the vision for mixed-use projects is to create an integrated living, working and recreation hub providing an array of considered amenity within walking distance – creating a convenience-driven landmark that provides value to all visitors.

People living at new mixed-use precincts enjoy resort-style amenity like pools, gyms, saunas, spas, dining facilities and gaming lounges, however value is also created for the worker and neighbouring residential populations, as they can also access a host of public amenity including childcare facilities, supermarkets and retail, newsagents, chemists, cafes and bars, communal green space and even wellness precincts.

The benefits of leasing at a mixed-use development

At a fundamental level, mixed-use developments champion walkability and convenience at their core. By integrating important everyday amenity within easy distance of working or living spaces, this ultimately leads to greater satisfaction in the workplace and can help attract and retain talent.

Leasing or purchasing an office in a mixed-use development can also be a smart investment, as these developments tend to have higher property values and rental rates compared to single-use developments.

Overall, leasing an office in a mixed-use development can provide businesses with many benefits that improve operations, lessen an organisations environmental impact, entice new and keep existing employees, as well as enhance the reputation of an organisation by virtue of its neighbouring tenants.

For retail asset owners, the increased foot traffic at mixed-use developments can often drive solid revenue results for tenants due to the condensed population across residential and commercial components of the build, safeguarding investment properties and creating leverage among landlords for yearly rate increases. 

What future innovations will elevate mixed-use developments?

The next five years for the mixed-use development space is shaping up to be a very exciting period, particularly for the corporate and retail aspects of these projects. 

While smart building technologies such as touchless access for workers, wayfinding applications for tourists and coronavirus-killing HEPA air filtration systems are already in-play, savvy developers are considering several sci-fi style integrations to boost the experiential and everyday value of mixed-use projects.

New developments are likely to benefit from advanced innovations like virtual and augmented reality features that add value and entertainment to work environments, as well as deepen shopping, dining and visitor experiences.

From a commercial-perspective, employers must elevate the daily work experience for staff by creating a stimulating environment that extends beyond just work – this has become especially apparent in the post-COVID/work-from-home era. 

So, providing workers with opportunities to run everyday errands like doing the weekly shop, dropping the kids off at childcare for the day, or making a quick stop at the chemist will ultimately help attract people back into the workplace.

Due to the sheer size and operational resources needed to power mixed use projects, we expect state-of-the-art sustainability integrations will also play a key role in the progression of the sector.

Some of the sustainability interventions we expect to see are higher Green Star and NABERS rating targets, in-turn reducing daily operating emissions and carbon offset, as well as design considerations like green façades and rooftops, solar harvesting windows and rainwater recycling to drive energy efficiencies and reduce environmental footprints.

Mixed-use investment opportunities with Jones Real Estate

One of our most exciting Melbourne-based listings suitable for a mixed-use development is located at 405-421 Spencer Street, Melbourne. 

Known as Dalston House, the prime positioned 1,683 square metre land parcel is set within the city’s increasingly popular CBD West precinct and is approved for a 20-storey single tower project with mixed-use applications. 

Currently under offer, the versatile nature of the property means there is opportunity for its eventual owner to create a hybrid commercial, residential and short-stay accommodation landmark that could help entice Melburnians back into the city, as well as cater to an influx of returning international students, workers and travellers.

If you would like to learn more about current mixed use development opportunities, emerging trends across the broader commercial property sector, or discuss a separate matter, please reach out to us at info@jonesre.com.au

 

Photo: Ardan Park by PDG.

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