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.
This week's top stories include ITS' management buyout from Mercer, and The Pensions Regulator launching a probe into single-employer defined contribution schemes' default funds.
People retiring in the UK will on average outlive their pension savings by 10 years, according to research by the World Economic Forum (WEF).
Steps to improve auto-enrolment are uncontroversial and obvious, but the government is dawdling on introducing the necessary changes, argues Jack Jones.
Professional trustees will be expected to apply for accreditation as part of a framework intended to be launched on 1 July by the Professional Trustee Standards Working Group (PTSWG).