The Advantages and Disadvantages of Mixed Use Developments What is a mixed use development (MUD)? The Property Council of Australia defines mixed use as “a single building or site accommodating three or more uses such as residential, hotel, commercial, industrial, entertainment, education, medical or recreation.” There are advantages and disadvantages for developers when deciding to embark on a MUD. The cost, complexity and risks are usually higher than that of a standard development, but with smart planning, staying power and a receptive market the MUD can be successful and profitable. Advantages include:
- The risk being spread over different markets.
- Different uses working hand in hand eg. office workers need cafes and restaurants to have meals, residents may want to shop or go to the movies.
- Luxury or lifestyle buildings often attract overseas investment.
Important factors to be considered by developers to ensure a MUD is successful are:
- The right location ie. close to urban and transport hubs.
- Researching the right mix of tenants and uses to target the right market.
A MUD can be beneficial to the public, landlords, tenants and owner occupiers alike. Potential owners, landlords and tenants are often more attracted to a complex which has various uses and is enjoyed by the public. Benefits include:
- Flexibility of use.
- A ‘village style’ mix of residential, business and community organisations all within the same complex.
Advantages to landlords include:
- Ready-made customer base.
- Longer than usual trading hours.
- Variety of use.
Whether a developer or purchaser, careful consideration should be given prior to deciding if a MUD is right for you.