Mixed-use real estate projects expand as buyers seek integrated lifestyle

Such properties have residential, commercial facilities and are near education and healthcare institutes

Mixed-use real estate projects are gaining traction in cities as developers focus on consistent cash flow, a broad rent base, and sustainability. Typically, mixed-use real estate is a combination of two or more asset classes in a single building or development.

Mumbai-based Hiranandani Group said it is focusing on mixed-use developments with mega townships of 250-500 acres in Powai, Thane, Panvel, and Alibaug in Maharashtra and in Chennai in Tamil Nadu.

“Dominant factors like access to daily convenience, proximity to prominent education and healthcare facilities, like-minded community, open spaces for recreational activities, and entertainment arena attracts homebuyers who are skewed towards integrated lifestyle. For many it also enables a walk-to-work lifestyle which enhances ease of living,” said Niranjan Hiranandani, managing director, Hiranandani Group.

Bengaluru-headquartered BCD Group defines mixed-use projects as multiple asset classes designed for the end users, having components like living or residential, commercial, and office. Some mixed-use properties also have schools, play areas, universities, and medical facilities.

“Mixed-use developments are becoming widely popular in the major markets in the wake of changing consumer preferences. The way we work has changed drastically after the pandemic and people don’t want to travel long distances. Besides, they want to balance out the monotony of work with recreation and the options to spend leisure time,” said Angad Bedi, managing director, BCD Group.

BCD said mixed-use developments are viable for a developer as there is a diverse occupier portfolio that can fetch higher rentals than a standalone retail or office property. The capital value appreciation of mixed-use developments is also higher.

“We believe that the future is moving towards mixed-use projects because people want to have the conveniences of living, working, shopping etc., all within a single compound. If we look at the key markets, we will see that all the big developers are now shifting their focus towards mixed-use developments to get the best out of every asset class, with a holistic and unified approach in mind,” said Bedi.

According to real estate consultancy Anarock Group, mixed-use developments are gaining prominence across cities after Covid-19 as people want to live in open and green spaces.

“Buoyed by the growing demand, we saw developers buy land in cities like Noida, Bengaluru, Gurugram, and Pune in 2023. As per Anarock Research, at least 4 separate land deals were clocked in these cities spanning over a total area of 62+ acres. We also saw at least 5 land deals for integrated township projects over 1,136 acres in cities like Chennai, Ahmedabad, and Ludhiana. Integrated townships are essentially large residential projects which may have some element of a mixed-use development including either retail or a small commercial space etc,” said Anuj Puri, chairman, Anarock.  

Puri added that while there is interest from buyers for mixed-use developments, a lot will also depend on the infrastructure in cities. “As land for such large developments is now largely available in the city peripheries, there is a need for good physical and social infrastructure. Such areas need access to other key areas via sound public transport which inevitably depends on respective government authorities in each of the large cities,” he said.

Colliers, a commercial real estate services provider, said micro-markets with significant mixed-use developments or localities are fast emerging in areas such as Bandra Kurla Complex (BKC) in Mumbai and Navi Mumbai, and DLF Cybercity in Delhi-NCR. Apart from high occupancy levels, mixed-used developments have played a significant part in relatively higher average rentals of such established micro markets. Average rentals in BKC (Rs 284 per square foot per month) are significantly higher than other micro-markets of Mumbai and have increased marginally compared to 2022.

“The diversification of revenue streams through mixed-use projects, encompassing commercial, and retail components, will continue to remain an attractive proposition for developers seeking financial resilience. Upcoming major infrastructure upgrades especially in major cities like Mumbai, Bengaluru, Chennai, and Hyderabad, will indirectly play a significant role in facilitating the growth of mixed-use projects,” said Vimal Nadar, senior director – Research, Colliers India.

“Continued government and private sector investments in infrastructure, particularly in transportation, could further boost the appeal of mixed-use projects situated in well-connected peripheral locations. The integration of technology and smart solutions within mixed-use developments may enhance convenience and efficiency, offering residents and businesses innovative and connected experiences,” said Nadar.