As real estate in India goes vertical, developers are focusing in a big way on mixed-use development. Experts call it the need and future of real estate in the country with land being a scarce resource. Internationally, mixed use development has been quite popular for long.

Back home, Supertech has Supernova in Noida, a mixed-use development building, and is planning to come up with more. The first three floors will be commercial and thereafter residential. Multiplex major PVR has acquired space already. Talks are on with MNCs who are interested in buying space in office building right next. “We have sold 600 units of the total 1,500 residential units,” said R K Arora, CMD, Supertech.

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Similarly, in Mumbai, the Phoenix Mills is developing mixed use projects in Pune, Mumbai, Bangalore and Chennai, after the success of its High Street Phoenix project in South Mumbai.

In Lower Parel, Mumbai, Phoenix has a hotel on top of a mall. In Kurla, Mumbai, it has a mall on the lower floors and office on the top.

While these projects have malls, which will provide steady cashflows to the company, Phoenix Mills is selling offices to repay the debt in each of the project. Bangalore and Chennai projects also have residential components, which give additional cashflows to the company. However, the company has put its hotel plans in these projects on hold, given the slowdown in the market.

Hiranandani Developers is another group which is developing mixed use projects in Panvel near Mumbai and in Chennai. It has already developed two such projects in Powai in Mumbai and Thane in Maharashtra which have residential complexes, offices and a hotel.

NCR-based R G Group is looking at opportunities to build mixed used buildings. “Things are in pipeline right now. Mixed-use buildings are surely the future of the country,” said Aman Gupta, executive director, R G Group.

As retail is becoming more organised, and FDI in multi-brand retail may be allowed sometime soon, mixed use will be the future of buildings in India, say experts.

Mixed-use development is taking place primarily in large townships where office, retail, housing and commercial projects are coming up. It reduces the risk for the developers, explained Samir Jasuja, founder and chief executive officer at PropEquity. That is, if one segment is not doing well, the developer can focus on other segments. Once the whole township is developed, which can take 10-15 years, developers can command significant premium over sales and leases, Jasuja said. While investors can expect higher return, end users get the convenience, he added.

“Land will be a problem in the coming years, therefore mixed-use buildings and going vertical is the way out for efficient use of land”, said Saloni Nangia, president, Technopak. Technopak also noted that traffic problems can also ease out with such buildings, with shops being right below the residential buildings.

Consultants say mixed use projects are becoming popular due to easy financial closure and use perspective.

“These projects are becoming popular among multi-national corporate occupants as mixed use complexes will have food courts, night clubs, and serviced apartments. They think it is best tool for employee retention," said Raja Kaushal, BNP Paribas Real Estate and Infrastructure Advisory.

However, R R Singh, director general National Real Estate Development Council, said in India we do not need mixed use development buildings as the culture is not balanced, unlike developed countries. “How can you accommodate lower income groups in these mixed-use buildings. They do not go to malls,” he asked. He said in India, we already have shops in the residential colonies for daily-use items and do not need separate buildings for the same.

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