Why mixed-use schemes in Scotland’s property sector must strike a balance for living and working

Why mixed-use schemes in Scotland’s property sector must strike a balance for living and working

Mixed-use has been a key part of urban design and planning for more than 50 years. “Mixed-use reduces the need for travel, increases walkability and generates street-life intensity,” wrote Kim Dovey and Elek Pafka of Melbourne University in the Journal of Planning Theory & Practice earlier this year.

The benefits of mixed use can apply not only to areas but also to individual buildings. ‘Mixed-use’ can be a selling point for clients and tenants. The proximity of leisure and retail can add to the appeal of office locations. But what is the ideal mix? Can the mix become mixed up?

Darina Kerr, partner at CMS, will be speaking at a series of events in Edinburgh, Aberdeen and Glasgow this month on the “science of place-making”, the idea that property development is often most successful when it forms part of a place-making initiative. “Today, the most innovative developments blur the lines between work and life,” she says.

“Mixed-use lifestyle campuses, which combine office, residential, hotel, retail and leisure space are increasingly in demand. This type of space is designed for today’s generation of young professionals who want to work, live, eat and drink in a creative, vibrant atmosphere which also has pockets of calm. There is no one ideal mix – the success of an environment will depend on how its constituent parts come together to create a sense of place.”

City centres have traditionally provided this mix and they are back in demand. “Work accessibility is increasingly important for staff resulting in a growing desire for people to work in the city centre, close to retail centres, restaurants and bars,” says Cameron Stott, director at JLL in Scotland.

Steve Dougherty, head of real estate at Shoosmiths in Edinburgh, says: “Scotland’s leisure market, including retail, restaurants, bars and gyms, has seen a significant boost over the last decade.

“Its continued strength has led to large city centre schemes nearly always now including retail and leisure facilities along with high-end residential development. These include noteworthy schemes in Edinburgh, The Registers in St Andrew Square and the controversial and widely talked about ‘ribbon building’ at the former St James Centre.”

Chris Stewart Group (CSG) has been working on The Registers project. The buildings consist of 42 St Andrew Square, 28-52 West Register Street and 15-17 South St Andrew Street. Combining more than 15,000 sq ft of ground-floor restaurant and bar, 61,000 sq ft of Grade-A office space accommodation and more than 50 serviced residential apartments, The Registers allow for West Register Street to be pedestrianised with the cobbled roadways and paved footpaths re-laid.

“Mixed-use is only relevant and successful if it is a place where people want to live and work,” says chief executive Chris Stewart. “Mixed-use is about creating a balance of employment-generating activity that co-exists with an element of residential or other accommodation – student, serviced apartment or housing – and supporting leisure and amenity uses.

“Well-designed public realm and excellent connectivity – roads, rail, cycling routes etc – pull it all together. The challenges are in responding to what the market needs and ensuring the uses are complementary and more importantly can be financed.

“People want to see more innovative development and creative uses for our cities’ built environment, but these often can’t be funded. CSG is in a different position – we can use our in-house operations and asset management expertise, and our own capital so we are less constrained and can reimagine those spaces.”

On the south side of Edinburgh’s St Andrew Square, Comprehensive Design Architects and Hoskins Architects designed a mixed-use development for Standard Life Investments and Peveril Securities consisting of 100,000 sq ft of Grade-A office space, 70,000 sq ft of leisure or retail and a range of luxury apartments.

“Appetite for mixed-use commercial property has historically been driven by UK institutions, with a typical building combination being retail on the ground floor and offices above,” says Alasdair Steele, head of Scotland Commercial at Knight Frank. “The idea behind it is straightforward: diversify risk by having longer retail or leisure leases on the bottom, and higher yields generated by the offices on the upper floors.

“If you look at an asset like Culzean House in Glasgow, it has Revolución de Cuba on a 25-year lease on the ground floor, with shorter-term leases and breaks in the upper offices. That said, we’re beginning to see a change in the profile of mixed-use property. In Edinburgh, for example, the old BHS store on Princes Street is being redeveloped to offer retail on the ground floor, with hotel accommodation on the upper floors.

“This can, to a large extent, be put down to Edinburgh’s appeal to hotel operators. They’re taking vast amounts of space in the city, including buildings that were traditionally office accommodation. From a developer’s point of view, hotels tend to offer a longer income stream and de-risk development, offering the opportunity to pre-let the whole building prior to commencing on site.”

In Glasgow CSG was named by the City Council as preferred developer for the buildings between Martha, John, North Frederick and George Streets, directly off George Square and previously housing City Council departments.

CSG’s proposals allow for a mix of uses, a publicly accessible pedestrian lane of ground and mezzanine-level restaurants, cafes, studios and bars, along with five-star serviced apartments, a hotel, student residences, and office and commercial areas.

“Our George St, Glasgow project is about place-making and creating a new destination in the heart of Glasgow,” says Stewart. “Central to that vision is the creation of a lane extending through the site that will become a hub for a great range of restaurants, bars and cafes, independent boutiques and specialist fashion-to-foodie shops. This is about introducing something new and vibrant to the city that will be enjoyed by local people, just as much as visitors.”

On the other side of the river Scottish Enterprise has appointed Drum Property Group for the next phase of Pacific Quay’s development. Plans for the 7.5-acre site include offices, homes, restaurants, bars and even a micro-distillery with visitor centre.

“Pacific Quay is now Scotland’s most important location for broadcasting, media, digital and the creative industries,” says Drum’s group managing director Graeme Bone. “This project represents a rare and exciting opportunity to create an outstanding development at a key strategic site for Glasgow, and one of Scotland’s most promising locations.

“Our ambition is to create a vibrant urban quarter that will be occupied 24 hours a day, bringing life to what is currently an under-used area. We want to deliver a prosperous and attractive destination that will appeal to a wide range of occupiers.”

Pacific Quay is on the doorstep of the SSE Hydro, the Scottish Event Campus (SEC), BBC Scotland and STV. “This is one of the key remaining waterfront sites to be developed in Glasgow, located directly adjacent to some of the city’s most iconic venues and visual landmarks. We look forward to working with other occupiers in the area to bring our plans for the site forward.”

The future for mixed-use looks likely to develop in the direction of a greater mix. The feeling of a mix is likely to extend with buildings in the development. “Occupiers continue to be focused on well-connected locations with excellent amenity to help ensure staff retention,” says Stewart.

Restaurants, bars, shops, gyms, cycle bays and changing facilities will become a feature of more buildings. “There is now additional focus on flexibility of office space, with occupiers keen to deliver their own style as part of the fit-out.”

 

Source: Insider

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