BR Analysis | How are ESG-oriented mixed-use developments changing the urban landscape?

Mixed-use properties are not a new phenomenon, but on a backdrop of a general housing crisis, greater sustainability awareness, and the impact of the pandemic, they have been growing in popularity.

By Ovidiu Posirca

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Properties combining multiple uses, such as residential, hospitality, retail and office, will continue to rise among new developments, as they effectively meet the end-user’s desire for a community-oriented, sustainable, and “walkable” lifestyle.

In an uncertain economic climate, multi-use developments become more appealing as diversifying income streams ensures greater long-term earning potential. Investors are willing to tackle the complexities of a mixed-use development, which often requires additional effort in the planning stage or greater upfront capital. Additionally, these projects place developers on the cutting edge of smart cities and sustainable planning initiatives, positioning teams as innovators and ensuring business longevity.

Whether it is a single building or a larger-scale urban development, this type of project offers a wide range of benefits:

- Improves sustainability and reduces carbon emissions: By design, mixed-use properties are convenient for their occupants. If you live in a mixed-use building, you will likely have the amenities you need nearby. The same also applies if you are working in the office, as you may not need to travel across town or commute to get to work or go to a restaurant. Having amenities close by encourages people to avoid travelling by car and, if necessary, use public transportation—all of which result in lower carbon emissions.

- Boosts occupants’ wellbeing: Mixed-use areas do not have to be restricted to residential units or commercial properties—they can include communal and green spaces, too. This can provide numerous benefits, from encouraging physical activity to improving the wellbeing and health of residents and occupants. In many developments, it can also place occupants and users closer to healthcare facilities and encourage greater social interaction, which reduces loneliness.

- Ensures flexibility and resilience: The pandemic brought a change of perspective: while owners and occupants of single-use buildings had to accept they were paying for developments that were at risk of not being used, those with mixed-use projects were able to be far more flexible.

- Creates greater revenue opportunities: The immediate effect of these benefits for landlords and owners of mixed-use properties is that they are in high demand. Office spaces in mixed-use environments can command higher rental prices than equivalent standalone office buildings.

- Supports the local economy: Mixed-use properties put local shops and businesses in a strong position, as workers and occupants will be more likely to spend money on nearby facilities. They also have an opportunity to provide work for residents.

- Promotes green building features: Green buildings often deploy energy-efficient infrastructure, including a greywater system, which recycles water from laundry, showers, and other purposes for non-human uses such as landscaping. Buildings with green design also frequently have solar water heating, green roofs, rainwater collection systems, and other sustainable design features, which developers tend to incorporate more easily into transit-oriented, multi-use developments.

- Enhances land use efficiency: The reuse of existing infrastructure helps multi-use properties utilise land more efficiently, taking advantage of the resources already available in a community. Many mixed-use development projects are transforming underutilised industrial space into vibrant community hubs.

Mixed-use projects could provide an answer to a range of problems the built environment is currently facing. With sustainability as a global emergency and a key focus for the construction sector, coupled with the UN’s 2050 net zero target on the horizon, these multi-purpose buildings and developments might just be the solution every business should be exploring.

Failure to embrace the latest sustainable practices into construction will leave businesses and communities at the mercy of a shifting climate. Mixed-use developments benefit both developers and city residents, providing development teams with a financial model that mitigates risk and creates vibrant, connected, sustainable, and resilient communities.