The white paper evaluates the key elements that define a residential mixed use development and how can social infrastructure add value by attracting price premium on property value. Does being near a school, close to the shops, a metro station in proximity, local sports and health facilities, different views, the right supermarket and even having a tree outside your house add value? The research looks at these components by studying international data and two key regional markets which are world leaders in developing large-scale communities, Dubai and Cairo.
Colliers International have conducted a study on existing developments in both cities and identified those components, some of which may not appear profitable to the developer, but, through adding value to the purchaser they can potentially enhance the profitability of the overall development and in the process, establish a developers brand that in itself can also increase value.
The research suggests that price premiums for simply being within a well-designed mixed use project can range from 15% to 30% in Dubai and 25% to 45% in Cairo. These percentages increase substantially when items such as developer brand, proximity to retail, education and healthcare and more recently, walkability has been added into the equation. The synergy achieved by adding mixed- use elements to support a residential community can increase the attractiveness of the overall development, rent levels, sales volumes and both the investment value and the market value of the project.
The research also studies the price premium models which consists of Tier 1 and 2. Tier one which revolves around a multiplicity of components such as ingress, egress, softscapes, retail and social infrastructure facilities. Tier 2 however, focuses on the individual unit within the development such as water view, garden view, golf course view, etc.