Future of real estate - Mixed-use realty development

With scarcity of land, more and more developers in India are thinking of going vertical. Mixed-use realty development has been very popular internationally and that is where the focus of Indian developers is shifting.

Generally in a mixed-use development building the first three floors are kept for commercial use and the rest for residential. People don't want much noise or chaos where they live, keeping this thing in mind about five per cent of space is used for retail. 

In Mumbai, Phoenix Mills is into developing mixed use projects. In Lower Parel, Phoenix has a hotel on top of a mall and in Kurla there is a mall on lower floors and office on the top. While the mall will provide steady cashflows to the company, offices will repay the debt of the project.

Hiranandani Developers is another group which is developing mixed use projects in Panvel near Mumbai and in Chennai. They have already developed two such projects in the past which have residential complexes, offices and a hotel. 

Consultants say mixed use projects are becoming popular due to easy financial closure and use perspective. The popularity of such projects with the multi-national corporate occupants is very high as these projects have food courts, night clubs, multiplexes, coffee shops, etc. in the same vicinity. Traffic problems can also be taken care off with such buildings.

Large townships with offices, retail, housing and commercial projects is one fine example of mixed-use development. The risk for developers is even reduced in such projects as if one segment is not doing well, the developer can shift focus on another segment and once the whole township is developed the developers can get a good premium. While investors can expect higher return, end users get the convenience.

However, in India a major chunk of the population come under the low income group category. The people in this category are those who do not go to malls and rather do their day-to-day shopping from small shops near their residences in their colonies.

But, once FDI is allowed in multi-brand retail, mixed-use realty development will be the future of buildings in India.

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