UK - Properties containing a bustling mix of offices, houses and retail outlets are producing higher returns than single-use developments, new research shows.
A report by property fund manager FPDSavills has found mixed-use buildings in major English towns have produced returns up to two percentage higher than their single-use counterparts.
Over the last five years, mixed-use buildings in sites such as Covent Garden and Avery Row in London produced a return of 11.3% compared with 10% for single-use sites.
FPDSavills director of research Yolande Barnes said buildings that had more than 10% of their income derived from more than one use attracted more people, creating a vibrant atmosphere that made it a more profitable investment.
She said: “If you have a gym, for example, next to an office and a shop, you find people are using all three and the constant flow of people creates a buzz.
“For mixed-use buildings this creates more capital growth. Homogeneous buildings could become a thing of the past.”
In the last three years rental growth for mixed-use developments has hit 4.7% per annum compared to just 2.9% for single use.
The report also found rental growth and higher returns were more pronounced for office premises within the multi-use development rather than retail.
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