Viability of Mixed-Use Developments

• Mixed-use developments, in general, can create additional value and outperform

standard single-use real estate developments: (1)
̶ Unlocking additional value
o Synergy and appeal of a quality mixed-use development can increase office and retail
prices, rents and occupancy rates as well accelerate absorption rates
o Retail tenants may be willing to pay higher rents because of the increased customer
traffic generated by compatible and complementary uses
o Residents and hotel guests are attracted by the convenient location of dining, retail and
entertainment venues on the site
̶ Potential of attracting customers from outside conventional trade area
boundaries
o Adding components such as parks, walking trails, playgrounds, ball fields, community
centers, and even municipal buildings can create habitual or repetitive traffic flow from
outside the traditional boundaries
o Boutique shops and soft goods retailers, which make mixed-use developments more
enjoyable and not just functional, rely on regular visitors from greater distances who are
likely to patronize these shops
o Entertainment venues may draw customers from a geographic market area beyond the
market area for the retail uses

(1) The Counselors of Real Estate, Spring 2009, Real Estate Issues Vol.34, No. 1: “Mixed-Use Development and Financial Feasibility: Part I –
Economic and Financial Factors”

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Viability of Mixed-Use Developments (Reclamation Project)
• Blank canvas: unique opportunity to product differentiate as a reclamation project
Selected reclamation projects Key takeaways
1. Songdo International • As the business district was built from scratch, developers took
Business District (600 has) it as an opportunity to invest heavily in technologies that had
Incheon, South Korea yet to debut in conventional cities (ex. a pneumatic waste
disposal system that uses pipes to suck trash from individual
homes into processing centers that automatically sort the
material and recycle it)(1)
2. Dubai Marina (600 has) • Due to lack of context as a place with few historical references
Dubai, UAE and no traditional real estate market, there was unprecedented
freedom to define the development(2)
• Intended to be built out over a long period of time, framework
used for the masterplan was creating a sense of variety.
Market conditions will change over time, as will community
needs and priorities(2)
3. Pluit City (450 has) • With the reclamation of several islands and a sea wall located
Jakarta, Indonesia in deep water and cost recovery a major challenge, only a new
iconic waterfront city with high quality development would
attract major investors. The Great Garuda (a mythical bird and
the national symbol of Indonesia) protects the National Capital
of Indonesia against the sea. It is also the first image of
Indonesia which foreigners and Indonesian expats will see
when landing over the Bay of Jakarta(3)

(1) Financial Express, 2 Nov 2014, “Smart city or ghost city?

(2) Designbuild-network.com, accessed 27 Jul 2017, “Dubai Marina, Dubai”
(3) Governments of Indonesia and the Netherlands, Oct 2014, “National Capital Integrated Coastal Development – Final Master Plan” 2