Mix and match
Total Property - Issue 5 2019
Mixed-use development is the buzz-phrase on property lips with a variety of property assets being layered – at scale – resulting in best-and-highest-use outcomes for previously under-utilised land.
At its simplest, a mixed-use development is an urban development integrating various asset classes. The combination of food and beverage, office and residential, master-planned appropriately, can generate a beating heart in a community.
The latest Global Cities report from Bayleys’ global partner Knight Frank says rising incomes and the war for talent are helping shape these urban environments.
Liam Bailey, Knight Frank's global head of research, says the gap between work and home is narrowing as vibrant mixed-use locations take over city centres.
“Worldwide there’s a growing focus by city authorities and private developers on creating true mixed-use environments – those that aim to provide seamlessly for living, working and leisure,” says Bailey.
“This process has been encouraged by shifts in economic activity. For example, the redevelopment of former industrial and dockland districts near city centres, and by rising competition between businesses as they vie to attract and retain talent.
“Young employees, in particular, seem less attracted to the pattern of travelling from a monocultural housing zone to a similarly one-dimensional office neighbourhood.”
Employment growth in finance, information, telecommunications and business services is further fuelling the mixed-use concept.
Around New Zealand, local bodies have revised urban renewal initiatives in response to land and housing shortages and these constraints have also helped drive mixed-use real estate investment.
Higher-density, mixed-use development is being encouraged along transit lines, while refreshed zoning supporting mixed land uses is transforming city-fringe and waterfront areas.
Auckland’s Wynyard Quarter is the poster child. Auckland Council's property development agency, Panuku Development Auckland, entered into development agreements with the private sector to transform the utilitarian working waterfront into an attractive mixed-use precinct.
While providing integrated retail, hospitality, residential and office environments, the precinct also optimises connection with the waterfront.
Meanwhile, Auckland’s Hobsonville Point has been transformed from a hub for land- and sea-based aviation to a thriving master-planned community.
Willis Bond & Co project director Wayne Silver says the company was first attracted when it acquired the rights to develop the residential 4.7 hectare Sunderland A Block in 2013.
Willis Bond’s mixed-use project, Catalina Bay, comprises 1.8 hectares of north-facing waterfront land at the tip of Hobsonville Point, just 13 kilometres from Auckland’s CBD and connected by ferry, bus and motorways.
“Catalina Bay will transform an area of once under-utilised waterfront land into an active seaside village consisting of a considered blend of quality retail, hospitality, commercial and residential offerings,” explains Silver.
Stage one of a proposed three-stage masterplan has been completed with refurbishment of air-force hangars and workshops. Key food-and-beverage outlets have opened, along with office space and a co-working space in a 1930s hangar.
Stages two and three will include up to 75 exclusive apartments alongside commercial, hospitality and retail tenancies.
In Queenstown, several mixed-use precincts are emerging – largely based around hotel developments such as those facilitated by Safari Group. Its Ramada and Wyndham complexes offer accommodation, hospitality, service and retail.
Queenstown Lakes District Council has announced a preferred bidder for the redevelopment of the former Lakeview Holiday Park, beside the town centre and Lake Wakatipu.
Chief executive Mike Theelen said the preferred bidder was “a talented mix of Kiwi investment and Australian development that will enhance the quality of our natural, business and living environment”.
The consortium is led by Melbourne-based developer Ninety-Four Feet, which will hold a 75 percent stake, and Auckland-based Augusta Capital Limited, which will hold 25 percent.
Expected to be a $1 billion-plus project staged over 10 years, it would include high-end hotels and residential accommodation, office and retail space, says Mark Francis, managing director of Augusta.
He says it’s attractive to Augusta as it provides an assured pipeline of product for its funds and investors. “Mixed-use development is a neat fit for a managed fund as there’s a spread of risk with diversified income streams.”
The Hawke’s Bay village of Havelock North is also getting on board the mixed-use train.
In Joll Road – a major roading spoke – progress is being made on 15 Joll, a retail and hospitality precinct by Murrayfield Properties Ltd, owned by locals Jonathan and Cristina McHardy’s family trust.
Trust spokesperson Warren Ladbrook says there was demand for a different type of office and food-and-beverage offering following completion of the Porters Boutique Hotel development with its commercial, retail, food and hotel offering.
There are four hospitality units and five office spaces in stage one, with only one of each still available. Stage two of four stages will commence soon.
Later stages will follow a similar mix of office and food and beverage with some other retail and service tenancies. Residential and accommodation options are also possible.
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