Mixed-use developments are lifting urban locations and blurring boundaries between property asset classes as international trends play out in New Zealand's commercial real estate market, according to new industry analysis.
Large-scale, mixed-use urban developments are seeing the layering of a variety of property assets, resulting in best-and-highest-use outcomes for under-utilised land, analysis by Bayleys shows.
At its simplest, a mixed-use development is an urban project that integrates various asset classes in a concentrated area.
The analysis finds that developments are challenging traditional property models and offering flexibility, with design and layouts able to morph according to the needs of current and future tenants.
Ryan Johnson, Bayleys' national director commercial and industrial, says property developers, facility managers and tenants are all finding their feet in this briskly changing landscape.
"Within one cleverly designed, mixed-use asset, a tenant, for example, could now work, shop, eat, exercise, and live. The combination of food and beverage, office and residential uses, when master-planned appropriately, can generate a beating heart in a community, while reigniting an urban location which may previously have been under-utilised."
The analysis builds on research from Bayleys' global partner Knight Frank that vibrant mixed-use locations were taking over city centres as the gap between work and home narrows. 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 Liam Bailey, Knight Frank's head of research.
"This process has been encouraged by shifts in economic activity. 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."
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 agreements with the private sector to transform the utilitarian waterfront into a mixed-use precinct.
Meanwhile, Auckland's Hobsonville Pt has been transformed from a hub for land- and sea-based aviation to a thriving master-planned community. Willis Bond & Co's mixed-use project, Catalina Bay, comprises 1.8ha of north-facing waterfront land at the tip of Hobsonville Pt, just 13km from Auckland's CBD and connected by ferry, bus and motorways.
In Queenstown, several mixed-use precincts are emerging, largely based around hotel developments such as those 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.
- Material supplied by Bayleys