Why investing in a mixed-use development is a golden goose

In the fast-paced world of real estate, savvy investors are constantly on the lookout for golden opportunities – and in the South African property market, opportunities don’t shine much brighter than mixed-use developments. 

Integrating residential, commercial and retail spaces, these developments offer a plethora of benefits to both investors and residents. By bringing the live-work-play dream to life, mixed-use developments have caught the eye and the imagination of many South African investors, buyers and tenants. 

The purpose and advantages of mixed-use developments 

Mixed-use developments serve multiple purposes and are designed to address various lifestyle needs. By combining different land uses, such as residential, commercial, retail, office and recreation, they cut out the commute for many residents, which leads to a myriad of environmental benefits. Many mixed-use developments incorporate sustainable design and green building practices, which can lead to reduced energy consumption, waste generation and carbon footprints. They also create vibrant communities and convenience that’s second to none.

Over and above this, from an urban planning perspective, mixed-use developments maximise land-use efficiency. Integrating multiple types of establishments on the same site minimises vacant or underutilised spaces. These developments also serve to address the burgeoning demand for housing, as they are often able to provide a range of housing options. From affordable apartments and townhouses to luxury standalone houses, mixed-use developments can have it all.

Thanks to their provision of recreational facilities, gyms, parks and open spaces, mixed-use developments encourage their residents to engage in physical activity and lead healthier lives. These features make mixed-use developments popular in the eyes of prospective tenants who want to get healthier and live their best lives.
Those wishing to invest in mixed-use developments have two options: you can either buy into a preexisting development or bring a whole new vision to life by investing in development ground.

The cons or concerns related to mixed-use developments

As with any type of investment, it’s important to consider the potential risks and challenges associated with investing in mixed-use developments – as well as the various tools you have at your disposal. For starters, if you invest in various types of property within a development, it will mean managing different types of tenants, each with their own lease terms, needs and expectations. It is important to work with a real estate expert when choosing your mixed-use-development investment, as developers may sometimes spread their resources and attention too thinly, and this can have an impact on the overall quality and success of the development. 

Reasons why mixed-use developments make a great investment

If you’re a would-be homeowner, investing in a mixed-use development makes sense because of all the amenities you’ll have access to. If you’re a property investor, the popularity of mixed-use developments means that you’ll get an outstanding return on your investment – both from renting it out and from selling it at a later date. Due to their proximity to various amenities, properties in mixed-use developments are likely to have higher rental yields.

Mixed-use developments generate income from various sources, including residential rentals, commercial leases and retail tenants. They thus provide an easy opportunity for property investors wishing to diversify their portfolios.

In addition, many urban areas are experiencing a shift towards more sustainable and walkable communities. Mixed-use developments cater to this trend by offering an integrated lifestyle. As mixed-use developments tend to appreciate in value over time due to their strategic location and convenience, such an investment is a sound long-term financial strategy.

Mixed-use developments will continue to become a bigger part of South Africa’s real estate landscape. To start your investment journey, contact the Seeff team today.