Gone are the days when developers took a shot in the dark choosing retail tenants, with some white elephants that followed.
The retail component of a mixed-use space is optimised today with the help of consultants and technology, underpinned by solid developer experience, greatly improving and securing returns on investment.
This is especially important for mixed-use developments, because, as Nicholas Stopforth, MD of the Amdec Group (developers of Melrose Arch, Harbour Arch and the Yacht Club), observes, ‘new urban developments (mixed use) have a hugely positive impact on the economy, driving job creation in the construction, hospitality and retail sectors.’
In the case of Amdec’s planned R10 billion Harbour Arch, for example, it is set to change the entire Cape Town skyline, much like Darling Harbour did for Sydney and Canary Wharf for London. So the retail mix here needs to be painstakingly composed, making the most of this premium location.
LOCATION IS KEY
Each mixed-use development is specific to its location. A mixed-use development in a CBD is very different to one in a suburban area, with different needs and markets.
Established mixed-use developers, from the outset, familiarise themselves with the relevant municipal spatial development framework (SDF) outlining the city’s development nodes.
These nodes are in keeping with government’s strategy for urban growth to be compacted, in other words, promoting higher density, mixed-use development in well-located parts of our cities, rather than spreading out.
The retail component depends on how far the development is from other shopping centres and amenities like schools and hospitals. ‘Mixed-use developments on the urban edge have to consider providing these amenities if they’re not close by,’ says Nicolas Kyriacos from Investec Property.
A good example is Steyn City near Midrand, which is close to Mall of Africa. As such, the retail mix in its planned 5,000 square metre ‘city centre’ will come down to the essentials expected in a high-end residential environment, such as a small grocery outlet, deli, pharmacy and coffee shop. ‘There will be a clinic, but not a hospital, as there are private hospitals in the vicinity,’ says Guiseppi Plumari, CEO of Steyn City Properties.
Also, in developments that are further from the city, thought has to be given to nightlife. ‘The shops and services you have must also support an exciting nightlife, so residents aren’t forced to leave in search of entertainment,’ says Brett Petzer, founder and COO of The Green Housing Company.
Once the development is complete, a leasing development team steps in to determine the best mix of retailers to be installed in the gross leasable area (GLA), as well as the best positions for the different businesses.