Are you interested in investing in commercial real estate but unsure of where to begin? Or even better: Are you having trouble deciding whether to make your next investment in a residential or business space?
It could be time to expand your investment portfolio with a mixed-use property. Commercial, residential, and even industrial spaces are all combined into one building, as the name suggests, in mixed-use properties.
For investors, this means getting the advantages of both types of properties in one (think: low vacancy rates and high-quality tenants).
Mixed-use developments are not, however, for everyone. Added benefits come with increased responsibility, especially when picking the correct property.
Learn more about mixed-use developments in Pakistan, and discover how to add one to your investment portfolio right away.
Vertical Versus Horizontal Mixed-Use Development
The first image that generally comes to mind when considering mixed-use buildings is a building with residences on the higher levels and first-floor retail space.
Although this is a common configuration for a mixed-use property, there are other kinds as well. Actually, this is what is meant by the term “vertical development.”
Vertical developments often have business space on the lower floors and private or residential space on the upper floors. Contrarily, horizontal developments are made up of single-use structures that are part of a larger complex.
In a horizontal development, some structures will be used as residential apartments and others as businesses. For renters and investors alike, horizontal and vertical developments can provide a number of advantages.
There is no doubting that migrants and tourists have always been drawn to the commercial hubs of thriving metropolises. However, Lahore’s landscape as well as the real estate market have been significantly altered by the emergence of mixed-use developments.
These integrated urban centers offer a diverse selection of residential and commercial properties for sale, giving customers a special chance to live, work, shop, and play all under one roof and fundamentally in opulent settings.
Lahore’s Increasing Demand for Mixed-Use Developments
The builders were quick to capitalize on the growing public interest in mixed-use buildings and shopping malls. The surge in the demand for mixed used development and increase in price of commercial units in Kuwait Mall Lahore, notably during the previous several years, was also linked to this boom in the development of mixed-use buildings.
The average price per square foot of commercial premises in the city increased by more than 20% between 2020 and 2022, the top property portal in Pakistan. This is rather amazing considering that many of these retail spaces were only recently made available.
It goes without saying that the consistent demand for creative mixed-use projects in Lahore supports these rising rates.
Investment Strategy
Developers picked this investment strategy because it offers a variety of financial advantages, particularly less risk and larger investment returns.
Let’s first look at the varieties of mixed-use buildings before discussing the advantages of living in one.
- Traditional main street real estate These structures are two or three floors tall. Typically, homes are on the upper levels while businesses are on the bottom floor.
- Reside and work (mixed-use) property: This type of property is preferred by small business owners because it allows occupants to live and work in the same space. Creative professions with studios on the ground floor include writers, photographers, and artists. As opposed to lofts or beds upstairs.
- Multipurpose property: This type of real estate combines condos with hotel rooms, retail stores, dining establishments, entertainment venues, and fitness centers for the benefit of the general public.
- Retail-district Retrofit: This new phenomenon of retail-district retrofit ideology is a new addition to real estate, regardless of whether we live in a downtown, suburban, or any yet-to-develop location. We have access to all the comforts of retail establishments, shops, and even revitalized mixed-use renovations.
- Office-commercial outlets: The idea of corporate offices and retail establishments has already taken hold in the major metropolitan areas. Due to the current demand and trend in the real estate market, there is significant development now underway.
Prominent Features of Mixed-use Buildings
Pakistan has contemporary infrastructure that complies with international norms. Let’s examine both the characteristics and the advantages.
The notion of the structures of these mixed-use buildings in Pakistan must also be understood.
Let’s begin, then. Several articulate characteristics are;
- There are a variety of places where you can invest or make money, including restaurants, spas, and stores in malls.
- Ultra-modern infrastructures are aesthetically included, much like investments in high ROI schemes.
- Stunning and has a wonderful interior/inside, including well-designed hallways and a parking facility.
- Eco-friendly and visually appealing outside features, such as solar power, energy-efficient windows, and ventilation systems. a lot more additions.
Why Invest in Mixed-use Buildings
wondering why we support mall developments in Islamabad rather than those in regular stores.
Greater Customer Exposure
The proximity of mixed-use developments to potential new customers is one compelling feature. When compared to standalone stores, mixed use development projects have the capacity to generate far more attention and foot traffic while also catering to both a residential and commercial audience. Additionally, occupants, including those within the mixed-use building, frequently spend money at mixed-use retail businesses.
Mixed-use development projects are beneficial for residential redevelopers, often known as real estate investors, because they not only offer income streams from both residential and commercial tenants, but also chances for additional growth possibilities.
Safety and Security
Since these are large projects, they are safeguarded with gated entrances and security guards, making it one of the safest locations to live and work. They are frequently outfitted with 24/7 surveillance.
Even the accessible security and IT rooms contribute to protecting the safety of the structure and its occupants. The likelihood of theft and other accidents can be readily reduced and regulated.
More Effective Property Management
The advantages of better property management are another factor contributing to the expansion of mixed-use developments. Real estate that combines residential, commercial, and industrial uses is referred to as mixed use.
Therefore, in order to meet the different needs of the entire community, a skilled management service firm is typically required. These advantages often include better processes, less vacancies between renters, higher-quality tenants, and better assistance.
Mixed-use buildings are big and offer a variety of alternatives for possessions, which implies more people and greater social interaction. You might come across folks from all different vocations and interests in a commercial facility.
Working in a mixed-use building fosters a network of positive, long-standing social interactions among its residents, which can aid professionals in connecting with others and expanding their networks. It also improves community life.
Lower Risk
Although mixed-use complexes typically help homebuyers, there are various benefits for residential redevelopers as well, with diversification being the most prevalent.
Investors can lower the risk that their real estate portfolio is exposed to because these developments offer the best of both worlds (residential and commercial real estate).
Nevertheless, diversification can aid investors in reducing the overall effect of problematic assets on their investment portfolio, including the capacity to offset the loss.
Mixed use developments are thought to be a generally safe bet during economic downturns, whether they be commercial or residential.
Mixed use developments, such as Bahria Mall and Residency, Bahria Orchard, offer lower risk along with better revenue, cash flow, longer leases, and less competition, making them perfect when looking to diversify your portfolio.
Under One Roof, Multiple Properties
Being able to flip between several commercial settings is a benefit of working or investing in a mall with multiple business settings.
You still have the option to shift your business setup to another floor where you can find complementary and supplementary enterprises if you feel that your current floor is overrun with irrelevant business setups.
Mixed-Use Buildings Are Models for Sustainable Real Estate
As we’ve already mentioned, the idea of mixed-use property is not new. This real estate paradigm has been used to create entire societies. Mixed-use properties appeal to people of all ages, despite the fact that they may be mistakenly associated with other trends that appear to come from the Millennial generation. The collaborative element of mixed-use commercial real estate is the main cause of the excitement.
Still unsure as to whether buying a mixed-use investment property is a wise move? Think about this Brick-and-mortar retail establishments across a variety of industries are sustained by the mixed-use real estate model.
Kuwait Mall Bahria Town Lahore Location
Although e-commerce behemoths like eBay, Amazon, and even Walmart have put local (and physical) businesses in danger of going out of business, mixed-use commercial real estate has shown that customers still want to go out and have a more in-person shopping experience.
Customers still enjoy eating out, getting their hair done, trying on clothes, seeing the dentist, looking at home décor, and grabbing a cup of coffee, for instance.
Determining what kind of business to include in a mixed-use real estate community is the one and only hurdle for investors in mixed-use property for sale. What features of your mixed-use real estate development will entice and retain tenants?
You will also be challenged with comprehending the market and identifying the ideal activity that will support your growth for years to come, much like when starting a new firm.
So, Are Multi-Use Real Estate Investments a Good Idea?
Purchasing a mixed-use piece of real estate for investment has many advantages. For tenants, having a variety of spaces in one place is convenient. The amount of travel required by renters is decreased by a mix of commercial, residential, and retail uses.
For the residents, a mixed-use residential building frequently fosters a stronger sense of community. Commercial real estate investors that purchase mixed-use properties can expect higher returns with less risk. Property with a mix of uses is typically in high demand and is frequently located in desirable areas.
Less risk is involved as well by spreading investments across various property kinds. Mixed-use real estate typically prospers even during economic downturns (when built and managed properly).
In short, mixed-use properties are wise investments since they reduce risk while raising income for investors.