Mixed-use is a win-win for developers, investors, locators
Mixed-use developments, by definition, strategically integrate residential, commercial, office, leisure, hospitality, medical, and even educational spaces in one location.
The selling points of these projects include the elimination of the stress of daily commutes, greater productivity, comfort, convenience, even the security of locators. For investors, a reasonable assurance of increasing real estate values because of the market attractiveness of these developments encourages their involvement in these projects.
Developers have, thus, intensified their participation in this type of development in recent years. Mixed-use developments in the Philippines have become a necessity in the past two decades.
For Metro Manila, the issue of traffic congestion and disparate transportation linkages and facilities, too much concentration of economic activities in traditional central business districts, and the ever-increasing competition for a finite piece of significant tracts of land make the mixed-use platform the most viable option for real estate developers.
Stand-alone residential projects or commercial establishments, especially if not connected to major thoroughfares or railway stations, will have inherent weaknesses such as accessibility, pricing and marketability.
Mixed-use developments, which address the issue of long hours spent on daily commutes resulting in less quality and productive time, have become a very viable alternative.
Outside Metro Manila, mixed-use developments have also brought companies closer to labor supply, utilized lower-valued real estate, and decongested Metro Manila.
Additional benefits include faster urbanization of areas outside the capital, which can positively impact wages, real estate values, and local government revenues; more cost leverage provided to international locators, which can make the Philippines even more attractive and competitive as a business process outsourcing (BPO) destination; and easing of fear of business-constricting lockdowns seen in Metro Manila during the pandemic. Current statistics on townships make a case for their high importance.
Within Metro Manila, there are already 32 (40 percent of all mixed-used developments in the country) mixed-used developments that combine residential, commercial, entertainment, hospitality, and office spaces. The number alone provides the best argument for mixed-use development success.
Its continued market attractiveness due to high investment returns and the delivery of what is promised by developers in terms of convenience, comfort, security and others make it a sustainable product.
Outside Metro Manila, there are currently 49 mixed-use developments (60 percent of total). Noteworthy is that 24 of these developments are just outside Metro Manila—13 in the north (Pampanga and Bulacan) and 11 in the south (Laguna and Cavite).
The number underscores the fact that there are good alternatives to office spaces in Metro Manila. Townships, understandably, can be used as important indicators of the strength, sustainability, and speed of urbanization in the Philippine provinces.
Mixed-use developments will continue to grow in significance, preference, and number. For developers, it is a sure way to market different real estate products in one location that can provide critical mass and economic activity. For investors, it is a very safe investment in terms of real estate appreciation and rental income. For locators, it addresses many of their daily grind issues, which is sufficient to justify their preference for the mixed-use setup.
The author is the chief executive officer of Lobien Realty Group Inc., a full-service real estate consultancy and property investments strategy firm Mixed-use developments will continue to grow in significance, preference, and number.
Sustainable mixed-use developments in the Philippines have become a necessity in the past two decades.