The future of mixed-use and what makes a successful design

Our cities are changing and we’re living more densely; the ways in which we live, work and play are worlds apart from a decade ago and as a result, we’re entering a new era in urban development that is preferencing mixed-use.

In simple terms, mixed-use blends multiple uses into one space. This includes residential, commercial, cultural, institutional or entertainment and can take the form of a single building, a block, or a neighbourhood.

Convenience and supply a driving force

The shift towards mixed-use is driven by a desire for convenience and localised offerings; where people are choosing to shop, play and stay local. The importance of providing people with the opportunity to meet the majority of their daily needs within close proximity to where they live is something that is also recognised at the State Government level.

In Victoria, for example, addressing the long-term strategies around population growth over the coming decades is outlined in the Plan Melbourne 2017-2050 strategy, and is underpinned by the principles of the ‘20-minute neighbourhood.’ This represents 10 minutes to the destination and 10 minutes back – or approximately 800m in total journey length – as research indicates that 20-minutes is the maximum time people are willing to walk to meet their daily needs locally.¹

Ultimately, Victoria’s strategy and other legislative policies across the different states place greater emphasis on the importance of providing diversity within our neighbourhood activity centres. The value of encouraging greater sustainable transport modes to reach daily needs not only serves as a better environmental outcome by creating less dependency on cars, (and thus less dependency on fossil fuels) but also helps strengthen a community’s local economy, and the overall physical health of each individual.

More recently, the importance of co-locating housing with retail services, local entertainment and community health services has been further amplified as a result of the global pandemic whereby lockdowns and travel restrictions bound people to a 5km or 10km radius. The importance of having a diverse mix of uses within close proximity became more important than ever before.

For landlords with existing retail assets, incorporating a residential component within the development provides for a consistent stimulation of activity, an uplift in property value and the added benefit of a level of resilience against market fluctuations. We’re seeing an increase in shopping centre owners, in particular, looking at the value in the space above.

To this point, emerging asset classes such as build to rent (BTR) have become a palatable option for many developers as it enables them to retain ownership of the asset in its entirety and avoid the complexity of strata titling up through buildings as individual apartments are sold off. The co-location of the existing amenity typically seen in shopping centres, along with a proposed vertical residential and commercial offering, has proven a vibrant and integrated community living model. 

The secret to a well designed mixed-use project

A well designed mixed-use project is one that doesn’t work in isolation but rather responds specifically to its local context. By understanding the environment around it, such developments stimulate the local economy and enrich the community. While the amenity offer within a single building plays a significant role in enticing residents and creating meaningful connections within the development, it’s important not to over-saturate an offer that may already exist within the local catchment.

Additionally, there are a number of cohorts that sit on different levels (in vertical buildings), but they should integrate with one another, as well as integrate with the surrounding community in terms of railway lines, bus terminals and so forth.

Sometimes we see a strikingly beautiful residential tower but the ground plane retail continues to sit empty as it hasn’t been designed with integration in mind – not only with the residential tower but the surrounding community. Remember a first impression is not a bird’s eye view, it’s generally from street level. That’s why the ground plane in many mixed-use developments is so important. It’s not only what people connect with first, but what helps stitch the development into its local context.

It’s for this reason that the design team and leasing team need to work together from the outset, where possible. It is critical they both have the same philosophy and vision moving forward, rather than leasing being an afterthought once the development is complete.

This not only extends to vertical mixed-use but mixed-use neighbourhoods and buildings, too. Recognising that the necessity for a particular tenancy mix is also likely to morph over time, it’s important to design these spaces with an inherent degree of flexibility to meet changes in market demand into the future.  

Another argument for mixed-use is it enables a developer or existing asset holder to diversify their portfolio and mitigate the risk associated with singular asset class saturation. The disruption to the retail sector through the rapid emergence of online spending and subsequent downturn in physical shopping has seen many developers seek a diversity of uses in any one development. Coupled with projected population forecasts in many suburbs and local council’s encouragement of the densification of sites in and around key neighbourhood activity centres, the mixed-use model has become ever more opportunistic.

The future looks bright

Looking ahead, the future of mixed-use is exciting. We’re likely to see more vertical mixed-use projects within the BTR space, particularly as the demand for affordable housing intensifies, and an increase in shopping centres integrating with commercial, hotel and residential.

In Australia, major retail supermarket giants are starting to understand the value of what’s above them and how convenience plays into this. Even the emergence of bulky good stores with vertical residential components is on the rise, as well as boutique industrial parks as mixed-use community hubs.

Designing mixed-use developments into the future means creating flexible spaces that have the ability to adapt and transform with the changes in demand of any particular element. For instance, placing greater emphasis on sustainable transport options such as public transport and integrated car hire not only responds to the general decline and shifting perception around car ownership, it also encourages a more sustainable impact on the environment well into the future. Coupled with this, the design of parking levels that can be adapted into commercial or residential spaces, for instance, further typifies the flexible design responses we encourage any future-minded mixed-use development to possess.