SA Affordable Housing September / October 2020 | Page 7

NEWS
Upward trend in African mixed-use
developments presents challenges
and opportunities
From the Cape’s Harbour Arch to Cairo’s The Gate,
mixed-use projects in Africa are revitalising urban
nodes and mirroring the international upward trend
of creating multifunctional precincts in urban areas.
There is a huge opportunity in developing mixed-use
facilities in specific African regions, although these projects are
not without challenges and need to be correctly approached to
maximise benefits, says Tim White, CEO of Profica. “We’re seeing
urban renewal redevelopment taking place in cities, where
old buildings are demolished to be replaced by new mixeduse
developments. There is an increased need for effective
use of space in both city centres, and property developers are
responding.
“Mixed-use developments offer the ability to live, work and
play in close proximity within a secure precinct, providing a
range of amenities while minimising travel time and expense.
In an ideal scenario, these pedestrianised precincts can offer
safety and security, convenience, sustainable technologies,
connectivity and increasingly, green nodes in an urban setting.”
From a developer’s perspective, White says that for mixeduse
developments, the challenge lies in bringing a mix of
residential, retail, and office buyers and tenants on stream at
a particular time, which doesn’t necessarily coincide with the
cyclical demand for these sectors in the property cycle.
"With African economies struggling, the biggest concerns
developers have about mixed-use precincts is securing and
keeping tenants at the right time.
White says large ‘ego’ projects which make limited financial
sense can take a long time to reach success, for example, Eko
Atlantic in Nigeria and some of the high-rise towers in Nairobi,
as they don’t follow the property investment fundamentals.
“We must understand the objectives, purpose and functionality
of mixed-use precincts and how they actually work. Of course,
our clients and investors require their developments to be
financially viable and they need to be planned with return on
investment in mind.”
White says that local government, the private sector,
economic development agencies, the community, multiple
development teams and possibly multiple owners must
collaborate to address planning, management, capital resources
and risk.
REQUIRES CLEAR FORESIGHT
“Effectively financing a multi-phased mixed-use project,
addressing environmental, transportation and infrastructure
issues and having a clear insight into the expected market
demand for a mixed-use development are some of the
challenges that must be tackled in a collaborative master plan,”
NAIRALAND FORUM
Eko Atlantic in Nigeria.
says White. “Too often, large mixed-use precincts have failed
during the first phase, due to the large cost of infrastructure
required in phase one to enable the developments going
forward. We recommend that one master plan co-ordinates a
number of different developments, each of which can develop
according to demand. So, it’s about planning for a final product
- an integrated mixed-use development - but also one which
can be constructed in various stages at different times and still
provide a good environment for the users during development.”
While challenging, White says that designing, owning, or
managing a mixed-use facility opens the door to multiple
opportunities. “Mixed-use facilities not only conserve valuable
land resources, but also present opportunities for building
efficiency, energy efficiency, and sustainability,” says White.
“As space is used 24 hours a day, developers and owners can
make it work harder in terms of returns and also find ways to be
more energy efficient in the long term, sharing services, parking,
and other amenities on a countercyclical basis.”
However, White explains that while sustainable and green
efforts are increasingly important to owners as improved
energy efficiency can save on costs, they also assess whether
the financial return on investment is worth it when choosing
systems and materials. “Going green requires a very big shift
from first-cost thinking, to life-cycle cost thinking,” he says.
White also emphasises the importance of future-proofing
developments, allowing for changes of use in the future. “For
example, with more efficient public transport coming online
in Sandton, the large basement parking areas in some of the
corporate office building will not be fully utilised. These areas,
if planned for, can then be used later for ‘last mile’ logistics
in congested city centres or if the parking areas are above
ground, it’s worth making the height between floors higher so
that the areas can be converted to commercial space later on,”
concludes White.
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