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Popularity of mixed-use assets making land more valuable

The increasing popularity of mixed-use assets is making land more valuable, experts agreed at Real Asset Media´s Netherlands Investment Briefing, which took place online on the REALX.Global platform recently.

A multi-functional lamp-post in the Netherlands

“Land values will be higher if you have many alternative uses for the same location”, said Peter Helfrich, managing partner, Primevest Capital Partners. “In the old days it was a binary choice for investors, offices and retail or resi, but now it’s a lot more mixed. If you look at land values it’s a diversifier.”

There is no fixed concept of what mixed use is, which means it is open to interpretation and re-invention depending on the location.

“We’re very interested in the social aspect of our developments,” said Jaap van der Bijl, CEO, Altera Vastgoed NV. “We take the space then add resi then retail and food and cafes, catering for different groups in the inner city. There are many different ideas to explore.”

Social aspects mean ensuring resi remains affordable

When it comes to residential the S in ESG comes to the fore, he said: “For me the social aspect is crucial: it means maintaining the affordability of resi for tenants.”

Every new mixed-use project in the city must take ESG into account and use technology to improve sustainability as well as liveability.

“The digital infrastructure works well in the built environment,” said Helfrich. “We’re looking at making cities smarter, more liveable and future-proof, creating mobility hubs because mobility is key.”

Optimising cities includes installing LED lights and sensors and multi-functional lamp-posts, that can be used to charge your car or your phone, and ring-fencing the city so that people walk or use bicycles, thereby improving air quality as well as mobility.

Ring-fencing cities makes them more liveable but it also has other consequences.

“As city centres are more difficult to reach, last mile logistics becomes ever more important,” said Tia van Beek, director transactions, the Netherlands, Principal Real Estate Europe. “There’s a real shift underway, driven by consumer behaviour.”

Experts agreed that logistics remains a favoured asset class in the Netherlands, but it has become very costly and possibly over-priced.

“A lot has been built and at some point we’ll reach over-supply,” said Helfrich. “Logistics is very expensive, but there is a lot of demand that will continue long after the pandemic.”