The concept of mixed-use developments is not new to many and this is a trend that the government is moving towards to better utilise our land use. This is evident from the CBD Incentive Scheme that was being announced at the Urban Redevelopment Authority (URA) Draft Master Plan 2019. This is part of the plan to rejuvenate the city centre by encouraging building owners to convert existing office developments in the Central Business District (CBD) to mixed-use developments. It is an effort to encompass the philosophy of Live, Work and Play into the lifestyle of hustling office workers.
So what is a mixed-use development? It is a type of urban development strategy to further enhance our living environment. Usually, it is a combination of residential and commercial spaces in one but it can also be integrated into other developments.
The Millennial generation is often looking for greater flexibility in their lifestyle and striking a balance between work and play; therefore, they often have a higher demand for better amenities near both where they work and live. Our society is also exerting pressure to drive for a more liveable, green and friendly environment. Thus, mixed-use developments are the solution to the demand for millennials and the society and government’s drive for a better environment.
Benefits of mixed-use developments
Convenience is just one of the many benefits that mixed-use developments offer, it is actually much more than that. Let’s go through them one by one.
- Unparalleled convenience
This is one of the most crucial advantages that mixed-use developments bring about. Everything you need is within your reach, without the need to travel far or even commute anywhere. This is especially important due to the hot and humid weather in Singapore; therefore, such convenience is key for many people. This also helps to save time for busy office workers, and provides them with recreational spots for them to unwind after a day of hard work. Doesn’t that just sound tempting and wonderful?
- Greater savings
Since there is less travelling needed as everything you need is within your reach, you’ll automatically spend less on getting around from place to place. Just imagine the amount of money you have to spend on fuels, parking fees and even the cost of taking public transport.
Not forgetting the fact that you might be stuck in a jam or get packed like sardines on public transport. I’m sure you have heard of the phrase time is money, so you could very well be utilising the time spent on transport to something better. In that case, then mixed-used developments is the solution to your problems.
- Greater possibility of passive income
Mixed-use developments are often very attractive to tenants and buyers due to the convenience and accessibility it brings, with everything within reach. This may allow owners of mixed-use development properties to fetch a higher price when they are selling off their properties due to the demand for such properties in the resale market. Buyers and tenants might even be willing to pay for a price that is higher than the market rate just for the amenities that they are able to enjoy.
- Appreciating location value
Due to the exorbitant price of mixed-use developments, it is mostly only affordable for affluent and wealthy people. As such this drives up the intrinsic value of the district and thus attracting more of such buyers to the area thus making it a hotspot in the resale market.
- Flexible investment
Buying a mixed-use development is definitely a worthwhile investment since there is flexibility to hold on to the investment. Owners can either sell off the property in the open market or sell their properties to foreigners who are big fans of convenient city living. The last option is to rent out the property and fetch a good rental value which provides a steady stream of valuable income.
Disadvantages of mixed-use development
While everything has its pros and cons, mixed-use developments are not perfect, and there are still some challenges that have yet to be overcome.
- Overcrowding and high-density living
This is due to the fact that there are many different buildings clustered together to provide for the needs and wants of the residents living in mixed-use developments. Especially with land scarcity in Singapore, buildings must be densely packed in order to have different amenities available at the same location. Coupled with high demand for such properties, it is likely for developers to build more of such properties within the same district which will result in overpopulation in the area and high density living since everything is condensed together.
- Affected by noise and smell
This can be due to the noises from the different shops and recreational spots which might affect the residential apartment or office buildings nearby. Not only so, the smell from different restaurants and eateries might also filled the air.
- Privacy issue
For example, mixed-use developments with residential space above a shopping mall such as Ion Orchard and Jurong Point. There could be a lack of privacy since residents would have to share a space with the commercial or industrial uses. In the event that there is a compromise on the security monitoring system, there might also be a possibility that anyone can enter the residential premise which may be an issue for residents.
- High price
Due to the nearby amenities and the convenience and accessibility that the mixed-use developments brought about, there is high demand in the market for such properties. This, as a result, drives up the prices of such properties and thus mixed-use developments usually have very high prices and often only affordable by those affluent.
- Possibility of parking shortages
Since it is a shared parking space in the mixed-use developments between the shoppers and residents, there might be a shortage of parking space especially during peak hours such as after work and during the weekends. In this case, shoppers are more likely to be prioritised as they help to bring in revenue for the development as compared to the residents. This may result in unhappiness within the residents. That said, however, many developments come with separate parking spaces between visitor and season parking lots.
Upcoming mixed-use developments in Singapore
There are a few mixed-use development projects that are to be completed in the next few years. Below is a list of some of these projects:
- Guoco Midtown
A $2.4 billion development by GuocoLand which features a 30-storey office block, a residential tower with more than 200 units as well as an array of public spaces across a gross floor area of almost one million square feet. This development is set to be completed in the first half of 2022. Since it is located at the Midtown, it will be very attractive to workers and this aid in talent attraction as well.
- Ruby Lane
This is a newly built 5-storey freehold mixed-use development with an asking price of $8.5 million. It is currently under a single title but there are still chances of it being strata-titled in the future. The first floor of the development is slated to comprise of commercial spaces, while a sky terrace is on the second floor. Three 4-bedroom apartments take up the third to fifth floors, each occupying one entire floor. The development has a total gross floor area of 6,068 square feet across the five floors.
- Parc Komo
This is a freehold mixed-use development by CEL Development. Parc Komo sits on a sizeable freehold site of about 202,000 square feet and has an average price of about $1,450 per square feet. It is the only mixed-use development in District 17 with both residential and commercial.
Though there are both pros and cons with mixed-use development, having mixed-use development in Singapore will be a very strategic move. This is because of our land scarcity thus, we will have to maximise the usage of our land to ensure that we will have a more vibrant environment. With such developments, Singaporeans will, therefore, be able to enjoy a balanced lifestyle with Live, Work, and Play.