Within a single decade, mixed-use quarters have evolved into one of the favourite topics among investors. The approach taken by town planners, namely overcoming the segregation of functions by conceiving of a city of short distances, and the trend toward diversification of real estate investments have combined to prompt a shift in attitude, so that the presence of a hotel or a residential component in an office quarter is no longer frowned upon. For property developers, however, the new approach creates a number of red-tape challenges when seeking to procure planning rights and permits.

Difficult Planning Processes

“If you wish to combine residential and commercial use, for instance, you face daunting emission control hurdles. Additional aspects that make the planning process yet more complicated include separation spaces, adverse shadow effects and physical partition,” said Rainer Schorr, the Managing Director of PRS Family Trust GmbH. He went on to say that mixing use types will often necessitate zoning changes or an entirely new zoning process. “It would be good if municipalities created so-called urban areas marked by greater flexibility in terms of planning parameters and types of use.”

Wherever mixed-use zoning is in place, the trend clearly points to diversity and is associable with enormous benefits for the respective environment. A good case in point is the “Am Tacheles” project in Berlin’s borough of Mitte. It is set in an area where the nearest supermarket used to be farther away than it would be in the German countryside. This means that the REWE market for which a unit of 3,000 square metres is earmarked in the basement will easily benefit several ten thousand people within a radius of roughly two kilometres – including the residents of the 275 apartments at “Am Tacheles” and the employees of the businesses that will rent the 41,000 square metres of commercial floor area there.

Flexible Use Options

Letting these units inside the “Am Tacheles” complex should be effortless. But outside the prime locations, the alternative use potential especially of office properties is becoming increasingly important because of the dynamic trends on occupier markets and the shifting trends in interior specifications. “Inflexible floor plans will quickly result in vacancies, especially in commercial use units,” said Rainer Schorr. “So, it makes sense to ensure that larger units are easy to divide into smaller units with flexible floor space configurations. This presupposes, of course, that the right sort of building infrastructure is in place, including everything from air conditioning and power supply to entrances and delivery access.” He added that such factors, while increasing work effort and construction costs, are indispensable for properties that are meant to produce long-term income. He believes that you can say as much for the redevelopment potential of buildings. “Options to expand, and extra conduits, will initially generate additional costs, but will often pay off years later.”

New Mobility Requirements

Schorr cites the trend towards electric mobility as a good example. “If you were frugal in the installation of electric conduit shafts when building an underground car park ten years ago, you may now find yourself unable to install the necessary charging capacities to meet today’s standard.” He generally believes that the topic of sustainable quarter development will increasingly be defined by the mobility requirements of its occupiers. This is why Rainer Schorr considers the reduction of travel times the definitive driver behind the trend. In his opinion, the days of purely residential quarters in the inner cities of German metropolises are numbered. “Commercial and residential use are moving closer together, and new dwelling and work formats like co-working and co-living are just two examples suggesting as much,” said the expert, adding that the trend provides relief to the transportation infrastructure, which in turn encourages the expansion of cities into their suburbs.

Neighbourhood Management Requirements

Schorr went on to say that the tighter synchronisation of residential and commercial real estate as well as of retail and leisure amenities enhances the urban quality of living, which is a factor of key significance for implementing certain lifestyle formats. On the real estate market, the fact is clearly reflected in the development of condominium prices. “We register the strongest dynamic in areas with a high building density and a diversity of use types,” said Rainer Schorr. He added that green areas also play an important role. Small-scale parks and squares are locations where city life unfolds, and which often become centre stage for a given quarter. He cautioned, however, that the expectation of a permanently high quality of stay for all users generally presupposes a professional neighbourhood management to ensure that publicly accessible areas are clean and safe at all times.

This represents a task that usually extends over the entire life cycle of an urban quarter, according to Schorr. “If you share the city you live and work in with a large number of different people, you cannot expect life around you to stand still even for a moment,” said Schorr. Then again, the operator of a given quarter is nonetheless responsible for sheltering the local occupiers from the tribulations of urban life as much as possible, so as to ensure that people can enjoy the benefits of their city in peace.