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A real estate sensation

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Mixed-use developments have become a truly popular concept in the real estate industry in the Philippines. One will be hard-pressed to name a big real estate company that has no mixed-used project — completed, ongoing or planned — of its own.

These sprawling developments, characterized by having dedicated spaces for residential, commercial and sometimes industrial uses, are far from being a local phenomenon. “Around the globe, [mixed-use] development has emerged as the new development paradigm in today’s cities,” writes Sarah Horsfield of Urbis, an Australian architecture and planning firm.

Some may be surprised to know that mixed-use development is not exactly new. In the words of Laura Alvarez, of The University of Nottingham, it has been around “for as long as mankind.”

“Research has revealed that complex cave systems hosted multiple uses hundreds of thousands of years ago. The Romans built large multi-use complexes across their empire. And during medieval times, people used to manufacture, sell and live in the same building,” she writes in an article for The Conversation, a news and commentary Web site.

In a 2011 applied research paper published in Georgia Institute of Technology’s SMARTech, which houses theses and dissertations, author Joshua Herndon notes that traffic congestion, increasing gasoline prices, changing consumer demographics and a longing for the sense of place and community are among the factors that have contributed to the resurgence of mixed-use development, at least in the US.

But these same factors can also explain why the real-estate concept is growing in popularity in a rapidly developing nation like the Philippines.

Local property developers are very much into it, even though building one costs big bucks. Recently, Federal Land, Inc., a wholly owned subsidiary of GT Capital Holdings, Inc. has partnered with Nomura Real Estate Development Co. Ltd. and Isetan Mitsukoshi Holdings Ltd. to develop the $400 million retail and residential complex called Sunshine Fort Landmark in Bonifacio Global City in Taguig, which is expected to be finished in 2025.

Ayala Land, Inc. has already expended P10 billion in developing its 11-hectare mixed-use property, Cloverleaf, in Balintawak, Quezon City, whose first phase — covering an area of around five to six hectares — will likely be completed in 2022. A new mall was opened there late last month.

Meanwhile, a P30-billion township — which is another term used to refer to a mixed-use development — is being developed by Megaworld Corp. in San Fernando, Pampanga on the site of the iconic Pampanga Sugar Development Company.

Nevertheless, mixed-use developments are not universally accepted. “People don’t like the idea of sharing their residential spaces with industrial and commercial uses. Issues such as noise, smells and loss of privacy prevent some buyers from investing in mixed-use schemes,” Ms. Alvarez says.

But that is changing, if gradually. “Examples across the globe are showing that living, working, socializing and entertaining locally has multiple benefits such as shorter commuting times and a more active and engaged social life. This is true in both large cities and lower density areas,” she notes.

She continues: “What’s more, mixed-use developments can help residents to establish frequent contact and long-term relationships with others. Virtual reality and global communication systems are connecting people around the world. But they also detach people from those they are closest to. A built environment that keeps people together and offers more opportunities to meet could mitigate this problem.”

While property developers continue to expand their portfolio of mixed-use developments, they may want to focus more on amenity, which, Ms. Horsfield says, is the new value differentiator. “Developers are competing to win tenants/investors into their buildings by offering gold star amenity packages…” and these packages may include high-end, hotel-style facilities, even dog parks, dog washing stations and doggy lounges.

Mixed-use developers might also want to take into account precinct programming. “[I]t’s not just about green space, it’s what you do within it to engage, connect and entertain the community. Cinemas, markets, local exhibitions, food vans, are just some of the engagement platforms available,” Ms. Horsfield says.

“Developers must learn to work with designers and urban planners to bring together affordable, healthy, green, smart design in order to transform social outcomes. This means that today’s developers need to be sociologists, as people are now using space in fundamentally different ways.”

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