mixed use development case study in kenya

Top Mixed Use Developments in Nairobi, Kenya

Dapo Runsewe . 3 years ago

residential

Share this post

Subscribe to our newsletter

Nairobi is the second largest urban agglomeration in East Africa according to the United Nations World Urbanization Prospects report (2018), Nairobi has an average household size of 2.9 persons according to the Kenyan National Bureau of statistics. With that in mind, we have profiled 3 mixed-use developments adding over 1,100 residential units, 90,000m2 of office…

Nairobi is the second largest urban agglomeration in East Africa according to the United Nations World Urbanization Prospects report (2018) , Nairobi has an average household size of 2.9 persons according to the Kenyan National Bureau of statistics. With that in mind, we have profiled 3 mixed-use developments adding over 1,100 residential units, 90,000m 2 of office space, and 78,000m 2   of retail space to each sector. 

Similar to the Azuri Towers in Eko Atlantic, these developments consist of retail, residential, and office elements creating an ecosystem where the residents can live, work, and carry out leisure activities. Also, these developments provide housing solutions for the young professional demographic, young families, and old families with all of them offering between 1 bed to 4 bedroom apartments.  

It is important to note that these projects were conceptualized after the completion of the mixed-use Garden City in Nairobi, which was developed by Actis. Completed in Q3:2015, Garden City also has retail (33,500m 2 ), office (25,000m 2 ), and residential (251 units) segments and was the pioneer mixed-use development at this scale.   The top mixed-use developments include:

TWO RIVERS DEVELOPMENT.

Two Rivers Development. Image Source: Centum Group.

The Two Rivers is a mixed-use development by Centum Group, it consists of office, retail, and residential components and was constructed in two phases. Phase 1 includes the Office segment which comprises of the Northern Tower (16,000m 2 ) and the Southern Tower (11,000m 2 ), it was completed in 2017 along with the retail segment which at 65,000 sqm is the largest mall in East Africa. French retail giant, Carrefour, is the anchor tenant of the retail segment. Phase 2 consists of the residential segment, Cascadia Apartments , which is billed for completion in Q2:2022.

Location : Limuru Road, Nairobi.

Developer : Centum Group ;

Main Contractor : Aviation Industry Corporation of China (AVIC) ;

Architect : Boogertman and Partners ;

Structural Engineer : 

Site Area : 100 Acres

No of Apartments : 471 units ( Cascadia Apartments )

Size of Office Component : 21,000m 2

Size of Retail Component : 65,000m 2

Status : Under Construction.

GLOBAL TRADE CENTER, NAIROBI

Global Trade Center, Nairobi, Kenya. Image Source: GTC Nairobi.

The Global Trade Center is a mixed-use development by AVIC International Real Estate a subsidiary of Chinese state-owned aerospace and defense firm, Aviation Industry Corporation of China (AVIC) International. It comprises of 6 towers : a 47 floor Office Tower, a 35-floor hotel tower (proposed JW Marriott hotel), and four residential apartment towers ranging from 24 to 28 floors. The GTC Tower is nearing completion.

Location : Intersection of Waiyaki Way and Chiromo Lane, Westlands, Nairobi.

Developer: AVIC International Real Estate, Kenya ;

Main Contractor : Zhejiang Chengjian Construction Africa Limited ;

Architect : Triad Architects & Planners , GMP International Architects ;

Structural Engineer : GIBB Engineering ;

Site Area : 7.5 acres;

No of Apartments : 514 units;

Size of Office Component : 67,200m 2

Size of Retail Component: 11,592m 2

RIVERSIDE SQUARE 

Riverside Square, Nairobi, Kenya. Image Source: Riverside Square and Skyscraper City.

Riverside Square is a mixed-use development mixed-use development located opposite the Chilean Embassy at Riverside Drive, Nairobi, Kenya. It consists of four wings namely: The Upper West Side(Retail and Office), Lower West Side (1 and 2 Bedroom Apartments), Upper East Side ( 1 bedroom apartments, two-bedroom apartments, and 3  bedroom penthouse duplexes), and Lower East Side (3 bedroom apartments). It is currently under construction and is billed to be completed in Q2:2021.

Location : Riverside Drive, Nairobi, Kenya.

Developer : Private Individual

Main Contractor : Rokoh (Kenya) Construction ;

Architect : Bowman Associates ;

Structural Engineer: Ngasi Consulting Engineers ;

Site Area: 3 Acres; No of Apartments : 198 units

Size of Office Component :10,684m 2

Size of Retail Component : 1,672m 2

With a population of just over 4 million people, Nairobi is East Africa’s second most populous city after Dar es Salaam and as such, projects of this magnitude are definitely bound to spur development not only in Nairobi but also in other East African cities.

What is your favorite development? Vote below.

• Two Rivers Development, Nairobi
• Global Trade Center, Nairobi
• Riverside Square

Related News

You will find these interesting

Linah Amondi . January 2024

Using the 30% rent thumb rule, an average citizen can afford to rent a Kshs 18,000 unit in the Nairobi Metropolitan Area...

BuyRentKenya

estate intel

Linah Amondi . August 2023

affordable housing

Dapo Runsewe . March 2023

lekki phase 1

This article is free to read if you register or sign in.

Simply register at no cost.

Questions or problems? Email [email protected] or call 0711 046 000 .

How mixed-use developments are reshaping Kenya's urban landscape

Bbs mall has already achieved 80 percent occupancy in less than year.

•Mixed Use are properly integrated developments delivering commercial, residential and retail space in far bigger magnitudes.

•The most daring of them all has been the upcoming development at BBS Mall, the largest in East and Central Africa.

Kenya has witnessed a surge in mixed-use development projects,  transforming the urban landscape and redefining the way people live, work, and play in cities.

These projects, blending residential, commercial, and sometimes industrial spaces in a single complex, are reshaping the real estate sector and according to experts fostering sustainable urban growth.

Some of the notable mixed-use developments in Kenya are Two Rivers Mall and Residential Complex, Garden City, Tatu City development and the upcoming one Business Bay Square (BBS) Mall in Eastleigh, about 4km east of Nairobi’s Central Business District

Mixed use developments are becoming all the rave.

According to Knight Frank, these developments are not the traditional, one high-rise buildings with a mix of retail space on the lower floors, office space on the upper floors, and, occasionally, some penthouses on the top-most floors.

They are properly integrated developments delivering commercial, residential and retail space in far bigger magnitudes

These expansive project combines shopping, entertainment, dining, and residential units, creating a vibrant community within its premises.

The business models are increasingly becoming popular destination for locals and tourists alike, offering a diverse range of retail outlets, restaurants, cinemas, and recreational facilities.

This according to industry players will be the new battle front in development of malls going forward.

The multibillion developments are planned to accommodate residential, commercial, industrial, and recreational zones, providing a comprehensive urban environment for its residents and businesses.

Digitally savvy middle-class Kenyans are increasingly demanding local brand experiences that align with what they see regionally, continentally and internationally, and are issuing new demands.

Such mixed-use developments have become popular in many locations globally.

In Dubai, for instance, residential homes, offices, and amusement parks compete for space with the city’s skyscrapers.

The most daring of them all has been the upcoming development at BBS Mall in Eastleigh Nairobi, the largest in East and Central Africa.

The development is twice the retail space of the second placed mall.

BBS Mall Chief Marketing and communications officer Dalmar Abdi says that following the completion of the region’s largest mall by size, the second phase will be the development of office and residential apartments.

“The mall phase two of the development is coming, it will be office blocks tower, two serviced block apartments and an international five Star hotel,” said Abdi.

The project size covers 6.4 acres with the property comprising serviced plots for commercial, residential and mixed-use as well as recreational and utility plots, landscaped areas and infrastructure routes.

Compared to its peers in the mixed use development, BBS mall has already achieved 80 per cent occupancy in less than year with the remaining space already recording high enquiries.

A factor that Abdi attributes to already available market that needed just the right products and services delivered to them.

He says the development is divided into retail and whole sale section, with the retail area already oversubscribed.

“Overall we are at 80 per cent of occupancy, the ground floor and lower ground are almost full also. Eastleigh is a large business and financial hub if you see the amenities that people needed they had to go out to get the amenities that they can now get here,” added Adbdi.

The occupancy rate has been faster than Garden City that attained a 92 per cent occupancy in January 2024, the first time in four years.

Eastleigh, which boasts of heightened business activities, has emerged among the Key hubs in the country accounting for more than 30 per cent of Nairobi’s tax revenues and five percent of Safaricom business.

Over the years, the area has evolved in leaps and bounds. It has curved its niche in more ways than one and sealed its place as a commercial hub to be reckoned with.

It is estimated that the area transacts an estimated $18,000,000 (Sh2.3 billion) daily.

President William Ruto and German ambassador to Kenya Sebastian Groth last month toured the development in an unofficial visit.

Traders expressed confidence that the visit by the Head of State is a testament to the improved security in the region, which is now driving more investments.

Emulating Dubai’s love for luxury, Abdi says in the coming three months’ plans are underway for the development of live gold trading area at the facility.

 “Soon we are working on a gold souk, where you will be able to buy and sell gold in real-time. It will be a complete gold market almost the Dubai style that will happen in the next two to three months,” added Abdi.

The thriving construction industry in Eastleigh has transformed the area’s skyline, setting it apart as a notable citadel in the growth of the country.

Garden City was the first fully-integrated development in Kenya. It was also the first private project of that nature to be granted a Vision 2030 status.

With a focus on sustainability and smart infrastructure, BBS says it’s looking to become a model for future urban developments in the region.

In Mombasa, the EnglishPoint Marina is a another of a mixed-use development that integrates luxury residences, a marina, retail spaces, and hospitality services.

The waterfront project not only enhances the city's skyline but also promotes tourism and economic growth in the coastal region.

These mixed-use developments are not limited to major cities; smaller towns like Eldoret are also experiencing a transformation.

The Rupa's Mall and Residences project in Eldoret is bringing modern retail experiences and upscale living options to the area, catering to the growing demand from residents and investors.

According to the experts, the rise of mixed-use developments in Kenya can be attributed to several factors, among them rapid urbanisation and population growth, which have increased the demand for integrated spaces that offer convenience and accessibility.

Moreover, the shift towards mixed-use developments aligns with global trends favouring sustainable and walkable communities.

How Eastleigh became a leading commercial hub

Why imitation is good for business, naivas on the verge of history as it opens 99th store, most popular, iconic hilton hotel to shut down after 53 years operation, latest videos, the news brief: ruto grants 6% raise, rejects cotu demands, i'll not be moved by critics sakaja says, defends atwoli, sign up for the free star email newsletter and receive the latest kenya news daily..

• ­Board of Directors
• Environmental Policy and OHS Policy Statement
• Quality Policy Statement
• Information Security Policy
• Workplace non-discrimination, anti-violence and anti-harassment policy

Engineering & project management

• Environment
• Transport infrastructure
• Socioeconomic development
• Information dissemination
• Annual Reviews
• News Releases

ldk.gr - Header Section

ldk.gr - Banner Section

Ldk.gr - main section, "montave" mixed use development, nairobi - kenya.

CATEGORY: Engineering & project management, Mixed Use Buildings

LOCATION: Nairobi, Kenya

START/END: 2014 - 2018

CLIENT: Hass Consult Ltd

ORIGIN OF FUNDING: Hass Consult Ltd

PROJECT VALUE: MEP: 13,800,000

LDK’s BUDGET SHARE: 100%

STAFF PROVIDED: 6

Type of Services

The scope of work of MEP installations includes Concept Design, Construction Design and Site Supervision of the following installations:

Water Supply / Sewage / Storm Drainage / Fire Fighting / Heating, Ventilation and Air Conditioning / Electrical Power / Lighting / Electrical Substations / Emergency Generators, UPS / Telephones - Data / Fire Detection / Radio - Television / Sound Facilities / Access Control / CCTV / Intercom / Lightning Protection and Earthing / Building Management System (BMS) / CO Detection / Lifts / LPG

Description

“MONTAVE” mixed use development,  located in Nairobi, Kenya. The development has the following characteristics:

• Seven basements providing parking spaces for the building and M/E areas (70,000  m²)
• Two floor Mall Area with retails, restaurants, super market, shops, etc. (13,000 m²)
• One floor Conference Center with Conference and Meeting rooms, Gallery & Business Club Center (6,000 m²)
• 344 Residential Apartments in 19 floors (42,000 m²)
• Hotel Tower with  147 Serviced Apartments and 168 Hotel rooms & suites in 40 floors (29,000 m²)
• Office Tower in 36 floors (20,000 m²)

Total build up area: 180.000m²

ldk.gr - Bottom info

Ldk.gr - home section.

HELLINIKON DEVELOPMENT, Attica Region - Greece

According to the proposed diverse land uses and demographic projections, the Hellinikon project is a major urban development scheme that, when fully ...

Category: Engineering & project management, Infrastructure

The Stavros Niarchos Foundation Health Initiative in Greece

In September 2017, the Stavros Niarchos Foundation (SNF), following discussions with the Ministry of Health, announced its intention to fully support ...

Category: Engineering & project management, Infrastructure, Hospitals & Health Facilities

FOUR SEASONS ASTIR PALACE HOTEL, ATHENS

The Four Seasons Astir Palace, located along the Athenian Riviera is the first Four Seasons hotel in Greece. The project entails the full ...

Category: Engineering & project management, Hotels & Resorts

Stavros Niarchos Foundation Cultural Center, Athens - Greece

The Stavros Niarchos Foundation Cultural Center, designed by Renzo Piano Building Workshop, in Athens at the Faliron Delta, consists of: the 170, ...

Category: Engineering & project management, Culture, Exhibition & Conference Centres

“SARIT CENTRE” Mixed-Use Development, Nairobi - Kenya

“Sarit Centre” Mixed Used development, located in Nairobi, Kenya. The development has the following characteristics:1.    Two ...

Category: Engineering & project management, Mixed Use Buildings

COSMOTE TV HQ & STUDIOS, KIFISSIA, ATHENS, GREECE

The COSMOTE TV HQ & Studios, a project designed by LDK Consultants, won the "Most stimulating architecture in 2020" award at E-Architect (one of ...

Category: Engineering & project management, Commercial & Office Buildings

The Museum of Contemporary Art of the "Basil & Elise Goulandris Foundation", in Athens, Greece

This Museum of Contemporary Art of approximately 7.000 m² in 11 levels, accommodates the Basil and Elise Goulandris Foundation world-class collection ...

Category: Engineering & project management, Museums & Memorials

Foundation of the Hellenic World - Hellenic Cosmos, Youth Museum, Interactive Media Centre, Athens

Youth Museum, Arts Centre, Interactive Media Centre etc within the Hellenic Cosmos of the Foundation of the Hellenic World, in Athens, Greece. The ...

University of Ioannina, International Centre of Hellenic Culture and Vocational Training, Greece

International Center of Hellenic Culture and Vocational Training (ICHCVT) at the University of Ioannina, Greece. The International Center complex ...

Category: Engineering & project management, Educational & Academic Buildings

MEP INFRASTRUCTURE INSTALLATIONS FOR THE METROPOLITAN HELLINIKON – AGIOS KOSMAS DEVELOPMENT, Attica Region

The project entails the execution of the Preliminary Design for the MEP infrastructure of the Metropolitan Hellinikon – Agios Kosmas Development. The ...

Hellenic Exchanges S.A., (HELEX), Athens, Greece

Hellenic Exchanges S.A. (Athens Stock Exchange) Office building with a 200-vehicles underground car park, in Athens, Greece. With its emblematic ...

Model Industrial Unit and Vocational Training and Educational Centre of Lakkia, Thessaloniki - Greece

Full refurbishment and rearrangement of an ex-industrial 9,684 m2 building for the operation of a modern educational unit for handicapped students, ...

Design & Project Management Agreement for the Construction of the new Warehouse in Stara Pazova

The project entails the project management, supervision, technical consulting and control of the construction of a new warehouse with a gross floor ...

Category: Engineering & project management, Logistics Centres

COSMOTE New Data Center, Athens - Greece

Upgrading of the infrastructure and of the construction of a new data centre (350 m2) in an existing building in Attica, ...

Category: Engineering & project management

AYIA NAPA MARINA, Ayia Napa, Cyprus

The project entails the marine works, infrastructure, road design and land development of a Marina with parking along with two Towers mainly for ...

Category: Engineering & project management, Housing & Residential Facilities

PROMOT E.I. Lainopoulos (Mercedes), Greece

Automobile workshops in Kifissia, Athens, Greece. Two new independent ultramodern automobile workshops (general service, electrical and dying units, ...

Category: Engineering & project management, Industrial Buildings

Greek Manpower Employment Organisation - Industrial Specialities Centre in Attica, Greece

Industrial Specialities Centre of the Greek Manpower Employment Organization in Mandra, Attica, Greece. ...

Olympic Sailing Centre, Agios Kosmas, Attica, Greece

Infrastructure networks (medium voltage networks, power substations, drainage pumping stations, road lighting, marina lighting, automated control ...

Athens Hilton, Greece

Ball Rooms, Meeting Rooms and a 2,000 people Conference Centre, of 6,000 m2 total surface in the ATHENS HILTON hotel, in Athens, Greece. ...

RIVER VIEW Development, Lower Kabete, Nairobi - Kenya

"River View" development, located in Lower Kabete, Nairobi, Kenya. The development has the following characteristics: Two types of Town Houses:8 ...

LAVIPHARM, Attica, Greece

Pharmaceutical and cosmetics industrial plant in Peania, Attica, Greece, consisting of a 7,000 m2 unit and sectoral extensions of 2,500 m2. ...

Deree American College Library in Athens, Greece

Library of the DEREE America College in Agia Paraskevi, Athens, Greece.Extension and renovation of the 3,000 m2 library of the college. ...

Bioclimatic Apartments Residential Complex, Kalamata - Greece

The project is about a residential complex with 120 bioclimatic apartments and their surroundings located in the eastern downtown centre of Kalamata, ...

The Mall Athens Due Diligence, Athens, Greece

The project concerns the electromechanical, architectural, structural and environmental due diligence tasks for a building with an area of ...

Category: Engineering & project management, Commercial Complexes

ATHENS METROPOLITAN EXPO, Attica Region - Greece

The Athens Metropolitan Expo located inside the region of Athens International Airport ("El. Venizelos") is a new exhibition and conference centre. ...

CANDIA PARK VILLAGE Hotel Complex, Crete island - Greece

CANDIA PARK VILLAGE Hotel Complex, A' superior, with 800 beds capacity (Phase A – Phase B) in Aghios Nikolaos, Crete, Greece. Candia Park Village is ...

ALFA ALFA HOLDINGS Company Office Buidling, in Athens, Greece

Office and commercial building complex of 10,500 m2 total surface with underground parking lot of ALFA ALFA HOLDINGS Group, in Agios Ioannis Rentis, ...

FOUR SEASONS Resort Complex, Sharm El Sheikh, Egypt

5-star Four Seasons deluxe resort complex in Sharm El Sheikh, Egypt. The resort comprises 136 luxurious guest houses, 27 suites, 61 family suites, 3 ...

Athens 2004 Olympic Shooting Centre in Markopoulo, Attica, Greece

The Olympic Shooting range is located in Markopoulo Attica, Greece. It is the venue that accommodated the 2004 Olympic Shooting at moving and fixed ...

Category: Engineering & project management, Sports Facilities

Settlement in Evlalos, Thrace, Greece

Infrastructure networks for a low-energy-consumption settlement of 2,400 inhabitants in Evlalos, Thrace, Greece. ...

Aldemar Olympian Village, Greece

Renovation and extension of Aldemar Olympian Village 5-star Resort complex in Skafidia, Western Peloponnese, Greece. Phase B: Extension of the ...

Teco-Cryo industrial unit in Attica, Greece

Refrigerator production industrial unit in Agios Stefanos, Attica, Greece. The unit hosts two underground parking and storage areas, a ground level ...

University of Crete, Faculty of Philosophy, Greece

Building facilities covering 10,000 m2 total surface for the Phisosophy faculty of the University of Crete in Rethimno, Greece. ...

HYATT REGENCY Hotel Thessaloniki, Greece

HYATT REGENCY THESSALONIKI is a 5 star Hotel in Thessaloniki, Greece, the first for the HYATT Group in Greece. The hotel complex consists of 118 ...

"DIAS" Interbanking Systems, Athens, Greece

Office building and data centre of the Dias Interbanking Systems S.A. company at the POLIS building complex, with a total surface of 5,248 m2, in ...

The land zone has an area of 382,000 m². The sea zone covers 165,000 m² with a maximum depth of 8 m. Buildings (8,945 m²) include offices, restaurant, ...

MONUMENTAL PLAZA Office Building with retail shops, Athens - Greece

A building complex which is situated in Maroussi, Athens and consists of three office and commercial buildings with a total surface of 49,322m², and ...

New Data Centre of PIRAEUS BANK, Maroussi, Athens, Greece

New Data Centre of the merged Piraeus Bank, ATE Bank and Geniki Bank in an existing ATE Bank building in Maroussi, Athens, Greece. The design was ...

Russian Federation Embassy, Athens, Greece

Building complex of the Russian Federation Embassy (8,175m2) with a parking lot, in Halandri, Athens, Greece. ...

National Bank of Greece, Athens - Greece

Office building, property of the National Bank of Greece with a total surface of 16,637 m2, in Athens, Greece. ...

SITIA BAY RESORT, Crete island, Greece

5-star Hotel Complex, of 357 beds capacity, in the Municipality of Sitia, in the island of Crete. The Resort consists of a SPA of 100 people capacity, ...

Institute of Geology and Mineral Exploration building at the Olympic Village, Athens, Greece

Olympic and Post-Olympic use of the building of the Institute of Geology and Mineral Exploration at the Olympic Village, Athens (6,000 m2 of office ...

Naxos General Hospital, Greece

Extension and upgrade of the General Hospital – Health Centre of the island of Naxos, Greece. Radical renovation and extension of the existing ...

Category: Engineering & project management, Hospitals & Health Facilities

Notos Galleries Department Store, Thessaloniki, Greece

New department store for Notos Galleries at the Stoa Hirsch estate in Thessaloniki, Greece, including the construction of a multilevel building of 12, ...

BIC - VIOLEX INDUSTRIAL COMPLEX, Attica Region, Greece

The Industrial Complex’s rearrangement includes three buildings (20,000 m²) of the Bic-Violex in Attica, Greece. Reformation of office facilities ...

Dubai Center for Research and Development of Fisheries (DCRDF), Dubai

The Dubai Center for Research and Development of Fisheries (DCRDF) was designed to accommodate three primary functions: fish production and ...

Category: Engineering & project management, Hatcheries

EAGLES PLACE Housing Development, Ghana

“Eagles Place” Housing Development located in Sakumoro-Tema, Ghana. The development has the following characteristics: 1.    Two ...

P.A.S. Giannina new Football Complex, Ioannina, Greece

The project concerns the design of the New Football Stadium Complex of P.A.S. Giannina in the city of Ioannina, northwestern Greece, located on a ...

Multifloored ENK Complex, Pristina, Kosovo

A Twin Office Tower with 41 floors (including a Mall), a Hotel Tower of 24 floors and an Apartment Tower with 20 floors, with 7 underground levels ...

Category: Engineering & project management, Housing & Residential Facilities, Commercial Complexes, Commercial & Office Buildings

COSTA NAVARINO Resort Complex (Starwood), Messinia Region - Greece

Infrastructure networks (medium voltage, power substations, pumping stations, telephone & data networks, etc) over a total surface of 1,300,000 ...

RADISSON BLU PARK Hotel Athens, Greece

Radisson Blu Park Hotel, 5-star hotel, comprises 135 rooms and suites, roof garden pool, conference halls and underground parking area. The hotel ...

Apolonion Housing Complex, Attica, Greece

Replacement of infrastructure networks for the Apolonion housing complex in Porto Rafti, Attica,  Greece. ...

Makedonia Airport, Thessaloniki, Greece

Infrastructure networks (wastewater treatment plant, signalling systems, apron lighting, 400 Hz installations, fire-fighting systems, surroundings ...

HOLIDAY INN, Attica, Greece

Holiday Inn 5-star hotel, at Pallini, Attica, Greece. The hotel comprises 191 rooms, 3 suites, indoors pool, conference halls and underground parking ...

Re-think Athens Project, Greece

The “Re-think Athens” project is a multifaceted intervention, revitalizing the most central parts of the city. Its aim is to improve the quality of ...

Category: Engineering & project management, Infrastructure, Transport infrastructure, Urban Transport

Museum of Byzantine Culture, Thessaloniki - Greece

New building and facilities of the Museum of Byzantine Culture in Thessaloniki, Greece, covering a surface of 10,500 m2. ...

ZOGRAFION LEGACY, Ioannina, Greece

The project entails the Zografion legacy house for the elderly of the Municipality of Ioannina, Greece. The house consists of a basement and two ...

Logistics Centre, Thessaloniki, Greece

New Logistics Centre of Theassloniki Logistics S.A. located in the industrial region of Thessaloniki. The logistics centre comprises a ground floor ...

Onassis House of Letters and Fine Arts, Athens, Greece

The Onassis Home of Letter and Fine Arts (of 18,000 m2 area) located on Syngrou Avenue in Athens, Greece. The building consists of  the ...

Athens 2004 Olympic Sports Centre - VIP & Press Building: Design, Greece

Preliminary design of M&E installations for the renovation, upgrade and extension of the V.I.P. and Press Building of the Olympic Sports Centre, ...

Category: Engineering & project management, Sports Facilities, Commercial & Office Buildings

Lakis Gavalas SA Company's building complex in Attica, Greece

The state-of-the-art complex accommodates the company’s main showroom, clothing and accessories storehouses, the headquarters and other support ...

AMANZO'E Hotel Complex in Porto Heli, Greece

Luxury 5-star Aman hotel resort in the Municipality of Porto Heli-Kranidi, in Argolida Prefecture. The AMANZO'E Project is Europe’s first ...

GM PLAZA, Nairobi - Kenya

"GM PLAZA” located in Nairobi, Kenya. The project has the following characteristics: 1.    Four basements providing parking spaces ...

AEGEK Company Office Building, in Athens, Greece

Office building and underground parking lot of AEGEK Group of General Construction Companies with a total surface of 18,300 m2, in Maroussi, Athens, ...

Cosmote Headquarters, Athens, Greece

Headquarters of the COSMOTE company with a total surface of 36,000m2, and a parking lot for 1,037 vehicles, in Maroussi, Athens, Greece. ...

Multi-use complex (commercial, office & residential), in Odessa, Ukraine

Building complex consisting of 9,000 m2 of commercial spaces, 7,000 m2 of offices and 8,000 m2 of residential buildings in Odessa, Ukraine. ...

MALL Sonae Sierra - Acropole Charagionnis, Athens - Greece

A 85,000 m2 mall, hosting 208 stores and a four-level parking area for 1,530 vehicles in Galatsi, Athens, Greece. ...

AAA GROWERS Head Office Building, Nairobi - Kenya

“AAA GROWERS” Head Office Building located in Nairobi, Kenya. The project has the following characteristics: 1.    Office Area: 1.800 ...

Paleo Faliro Medical Centre, Greece

Construction of new wing and total renovation of old facilities at Paleo Faliro Medical Centre, with a total capacity of 100 beds.In addition to the ...

ACHILOPOULIO, Volos General Hospital, Greece

Phase 1: Reconstruction of existing hospital and extension to a new 450-bed total capacity hospital in Volos, Greece. The 45,000 m2 building extends ...

CRETA FARM industrial unit in Arkadia, Greece

The project referred to the extension and renovation of an existing industrial unit of the CRETA FARM food production company in the area of Astros, ...

HYATT REGENCY Conference Centre, Thessaloniki, Greece

Conference Centre for 1,050 people in the Hyatt Regency Thessaloniki hotel complex, in Thessaloniki, Greece. ...

Conference centre with a capacity of 1,200 people at the hotel complex Aldemar Olympian Village, in Skafidia, Ilia, Greece. ...

Municipal Park of Kallithea, Athens - Greece

Services concern the MEP Design of the Municipal Park of Kallithea project, following the relevant donation by SNF to the Municipality of Kallithea, ...

EDIFICE Hotel, Nairobi - Kenya

Edifice Hotel located in Nairobi, Kenya. The Hotel has the following characteristics: 1.    Three basements providing parking spaces ...

MIRAMARE PARK Suites & Villas, Rhodes island, Greece

Renovation and extension of the 5 star MIRAMARE PARK Suites & Villas, , with 360 beds capacity. The reception area is regarded as the starting ...

National Technical University of Athens - Library building, Greece

New main library building of the National Technical University of Athens (NTUA), Greece, within the NTUA premises campus in the eastern outskirts of ...

University of Patras - Faculty of Medicine, Greece

Clinical Laboratories Building of the Faculty of Medicine of the University of Patras, Greece.Building facilities of 14,400 m2 total surface. ...

City Hall of Agia Paraskevi, Athens - Greece

Building Complex of the Municipality of Agia Paraskevi Services Building (above ground surface: 3,700 m2, total area: 11,500 m2), with underground ...

Category: Engineering & project management, Public Buildings

Vodafone headquarters, Athens, Greece

Vodafone Greece headquarters covering a total surface of 39,840 m², and parking area for 700 vehicles, in Halandri, Athens, Greece. ...

Gorgopotamos National Resistance Monument, Greece

Reformation of the monument's premises and surroundings landscaping of the Gorgopotamos National Resistance Monument, in Gorgopotamos, Fthiotida, ...

Media Markt - Saturn Electric & Electronic appliances retail chain in Greece

The project concerns the entry and flourishing of the Internationally Famous Electric & Electronic appliances retail chain of Media Saturn (2 ...

Faliron Delta Commercial Complex, Athens, Greece

Building complex at Delta Falirou, Athens, consisting of two office buildings  3,992 m2 each, one retail building and one entertainment and a 13, ...

Prefectures of Korinthia & Trikala: Public Private Partnerships (PPPs) on their administrative buildings, Greece

The interministerial committee for Public Private Partnerships (Ministry of Economy and Finance & Ministry of Environment, Physical Planning and ...

“MONTAVE” mixed use development,  located in Nairobi, Kenya. The development has the following characteristics: Seven basements providing ...

Esperides residential complex in Kifissia, Athens, Greece

ESPERIDES 45 houses residential complex in Kifissia, Athens, Greece. ...

Hellenic Petroleum Headquarters in Athens, Greece

Headquarters and administration building of Hellenic Petroleum S.A. with a total surface of 13,600 m2, in Aspropyrgos, Attica, Greece. ...

ABB Headquarters, Athens, Greece

Building complex of 7,000 m2 consisting of office spaces, storehouses, assembling laboratories and other support facilities, in Metamorfossi, Athens, ...

Building Complex for the Residency of the Prefectural Administration Offices, Karditsa, Greece

Bioclimatic Building complex for the residency of the Prefectural Administration Offices of Karditsa with a total surface of 15,000 m2 and ...

Corfu Town Historical Centre, island of Corfu, Greece

Water supply, sewerage, drainage, electricity, cable TV networks, fire-fighting systems, gas urban supply network and public lighting networks, ...

1-Source (PRATT & WHITNEY - Hellenic Aerospace Industry), Greece

Testing and repair unit for aircraft engines fuel feeder systems, in Tanagra, Viotia, Greece. ...

ASTIR PALACE Resort, Attica Region, Greece

Astir Palace Vouliagmeni is a 5 Star Hotel Complex operated and managed by Starwood. It is located in Vouliagmeni, Attica, Greece. The Project ...

AL MADINA A'ZARQA, THE BLUE CITY DEVELOPMENT, APARTMENTS, Al Madina A’Zarqua, the BLUE CITY Development, Muscat - Oman

Al Madina A’ Zarqa (Blue City) Phase 1 was intended to be the largest touristic real-estate residential developments in the Middle East, located ...

Pastoral School of Durres: Design, Albania

Pastoral School ("Resurrection of Christ" Theological Academy) within the premises of the St. Vlash Monastery of the Orthodox Church of Albania, in ...

ATHENS HILTON Hotel, Athens

Renovation and extension of the 5 star Deluxe ATHENS HILTON Hotel. The hotel comprises 527 rooms and suites, 4 restaurants and bars, 14 conference ...

Boehringer Ingelheim Hellas Pharmaceutical Industrial Unit, Attica, Greece

Pharmaceutical industry unit in Messogia, Attica, Greece. Reformation and renovation of an existing 5,000 m2 industrial unit. ...

Athens 2004 Olympic Games - Facilities & Infratructure (Technical consultancy), Greece

Technical Consultant for the provision of services on energy and E&M issues in general, concerning all the Olympic facilities for the Olympic ...

Infrastructure networks (medium voltage, power substations, water supply networks, pumping stations, water distribution, water treatment systems, ...

ROCHE Hellas office building in Athens, Greece

Office building of ROCHE HELLAS pharmaceutical company with a total surface of 5,860 m2, in Maroussi, Athens, Greece. ...

ANANTARA Resort Hotel Group, Al Madina A’Zarqua, the BLUE CITY Development (section 1.1.1), Muscat - Oman

5 star Luxury Hotel of the Anantara Resorts Hotel Group, of 300 beds capacity, consisting of deluxe bungalows, a 350 m² SPA, 3 outdoors swimming ...

Archaeological Museum of Iraklio, Crete island, Greece

Modernisation and extension of the Archaeological Museum of Iraklio, island of Crete, Greece, including the restoration and renovation of the ...

GRECOTEL AMIORANDES Hotel, Crete, Greece

The renovation and extension of the 5-star deluxe hotel complex Grecotel Amirandes, in Gouves Iraklio, Crete, Greece. The complex consists of 236 ...

Democritus University of Thrace, Departments of History, Ethnology and Greek Literature, Komotini - Greece

Departments of History & Ethnology, and Greek Literature, with their surroundings, at the University of Thrace Campus in Komotini, Greece. The ...

HALCYON HILLS spa Resort, Samos, Greece

Luxury 5-star eco-friendly SPA Resort “Halcyon Hills” close to Klima beach in the island of Samos, Greece, of 693 beds capacity with facilities that ...

REGENCY CASINO MONT PARNES, Attica Region, Mount Parnitha - Greece

Phase B: 5-star deluxe hotel of 170 beds on Mount Parnitha, Attica, Greece, along with SPA of 1,000 m2, Casino and Casino VIP halls of 6,000 m2, an ...

ATHENIAN “CAPITOL” COMMERCIAL COMPLEX, Athens - Greece

ATHENIAN “CAPITOL” commercial, entertainment and cultural complex with a total surface of 28,000 m2, hosting shops, restaurants, entertainment ...

PIRAEUS BANK New Office Building, Alexandras Ave, Athens - Greece

New offices with a total floor area of 8,100 m2 for the consolidated Bank of Piraeus and Bank of Cyprus, in an existing building belonging to Bank of ...

"GREEN HILLS" Mixed Use Development, Runda, Nairobi - Kenya

GREEN HILLS” Development located in Runda, Nairobi, Kenya. The project has the following characteristics: Three basements providing Parking spaces ...

Category: Engineering & project management, Mixed Use Buildings, Energy

WIND Headquarters, Athens, Greece

Headquarters of the WIND company in a two-building office complex (formerly IVI industrial complex) - Building A: 4,287 m2 and Building B: 4,613 m2, ...

TUNE Hotel, Dar - Tanzania

Tune Hotel located in Dar, Tanzania. The Hotel has the following characteristics: 1.    Hotel area (10 floors): 10.900m² 2. ...

SHEIKH KHALIFA BIN ZAYED CENTRE for Marine Research, Umm AL-Quwain

The MRC consists of: an Administration Laboratory Complex Building of 5.500 m2, including exhibition aquarium, foyer, conference halls, seminar rooms, ...

OLYMPION General Hospital, Patra, Greece

Olympion General Hospital in Patra, Greece of 20,000 m2 total surface with a 200-bed potential nursing clinic. The hospital services include amongst ...

DEMO, Attica, Greece

Renovation of the pharmaceutical production unit located in Kryoneri, Attica of 16,000 m2 total surface. ...

FOUNDATION OF THE HELLENIC WORLD - HELLENIC COSMOS, RESEARCH AND ENERGY CENTRE, Athens, Greece

Research and Energy Centre with their respective surroundings, within the Hellenic Cosmos of the Foundation of the Hellenic World, in Athens, Greece. ...

FRONTIDA CLINIC in Nea Erithrea, Greece

Frontida Clinic with a 200 bed capacity in Nea Erithrea, Athens. ...

W.S. Karoulias, Attica, Greece

Industrial unit and storehouses covering an area of 5,500 m2 in Agios Stefanos, Attica, Greece. ...

GRAND RESORT LAGONISSI Hotel Complex, Attica Region - Greece

Renovation and extension of the 5-star deluxe hotel complex Grand Resort Lagonissi in Attica, Greece. The complex spreads over an area of 24 hectars. ...

Metallic industrial storehouses (10,000 m2) for product repackage and distribution in Avlonas, Attica, Greece. ...

Grande Bretagne Starwood Hotel, Athens, Greece

Renovation of the 5-star Grande Bretagne deluxe hotel of the Starwood Luxury Collection in Athens. The hotel comprises 321 rooms, 59 suites, a roof ...

PIRAEUS BANK New Office Building and Disaster Center, Thessaloniki - Greece

New offices of Piraeus Bank (9,600 m2) and a Disaster Centre with a total area of 220 m2 in an existing building owned by Piraeus Bank in ...

International Broadcasting Center, Greece

Preliminary design of the M&E installations for the International Broadcasting Center (IBC) (70,000 m2) with underground car station (80,000 m2). ...

Old Iraklio Vegetable Market, Island of Crete, Greece

Renovation and re-planning of the greater area of the Old Vegetable Market in Agia Triada, Iraklio, island of Crete, Greece. ...

Residential Development of 54 houses in Tigoni, Limuru - Kenya

Residential complex development located in Tigoni, Limuru, Kenya. The development has the following characteristics: 1.    Five types ...

PIRAEUS BANK New Office Building and Data Center, Athens - Greece

New Office Building (4,500 m2 above ground surface and 1,500 m2 underground surface) and Data Centre (550 m2) of  the Piraeus Bank’s IT ...

PANTHEON PLAZA Larissa Shopping Centre Commercial Complex, Larissa - Greece

A mall with a total surface area of 27,000m², hosting 120 stores, a multiplex cinema (3 screens), 19 restaurants - cafe, bowling centre and a parking ...

FINCH HATTONS, Tsavo West National Park, Kenya

Finch Hattons is a game resort located in the centre of Tsavo West National Park in Kenya. Finch Hattons will be refurbished and obtain a more ...

Secondary Sewerage & Drainage Network of the Thriassio Area, Attica, Greece

Secondary sewerage and drainage network for the eastern and western sectors of the Thriasion area in Attica, Greece. ...

Residential complex in Odessa, Ukraine

The project referred to the construction of a residential complex covering a total area of 8,000 m2 in the city of Odessa, in Ukraine. ...

Agios Kosmas Commercial Complex, Athens, Greece

Utilisation of the Agios Kosmas Olympic facilities in Athens, Greece by construction of new buildings (hotel, restaurants, commercial shops, offices, ...

PIRAEUS BANK New Office Building, Papada str, Athens - Greece

New 4,000 m2 offices for the merged Bank of Piraeus and Bank of Cyprus, in an existing building belonging to Bank of Cyprus on Papada Street, Athens, ...

ALN Offices, Nairobi - Kenya

ALN Office Block located in Nairobi, Kenya. The project has the following characteristics: 1.    Three basements providing parking ...

University of Patras - Department of Pharmaceutics, Greece

Department of Pharmaceutics in the University of Patras, Greece. The 8,000 m2 building spreads along a lined high-ceiling luminous space, defined on ...

Technical University of Crete, Greece

Building facilities of 11,000 m2 total surface of the Technical University of Crete in Akrotiri, Chania, Greece. ...

Democritus University of Thrace, Department of Physical Education and Sport Science, Komotini

Building facilities for the Department of Physical Education and Sport Science, with its surroundings, of the University of Thrace Campus in Komotini, ...

PAPAGEORGIOU General Hospital, Thessaloniki, Greece

Papageorgiou General Hospital in Thessaloniki, Greece with a capacity of 750 beds (69 in intensive care & 25 in recovery units) of a 75,000 m2 ...

GRAND FOREST HOTEL COMPLEX, Metsovo, Ioannina Region - Greece

New 5-star Hotel Complex, of 130 beds capacity, in a 20,000 m2 plot, in the region of Metsovo, Ioannina Region, Greece. The complex consists of 7 ...

University of Ioannina, Department of Chemistry, Greece

New wing and surroundings of the Department of Chemistry of the University of Ioannina, Greece.The 10,714 m2 building hosts laboratories, offices, ...

Sewage Drainage Final Detailed Design Study for Plaka Dilessi and Dilessi Settlements and the Expansion of the WWTP Schematariou - Oinofytwn - Greece

PHASE A: Pre-Final Design Study with the following design parameters: Design population: 51,100p.e., Design Discharge: 8176 m3/d, Treatment ...

Olympic Press Village, Athens, Greece

A residential estate project in Greater Athens including 202 apartments and maisonettes (33,000m²) and green or communal spaces (80,000m²). It was ...

Archaeological Museum of the island of Lesvos, Greece

New Archaeological Museum of the town of Mitilini, in the island of Lesbos in north-eastern Greece. ...

CRETA FARM, Crete, Greece

Extension and renovation of an existing industrial building. Construction of a new cooling and freezing unit within the meat processing unit and ...

University of Athens - Case study building of low energy consumption: Design, Greece

The project referred to the construction of a case building of a total area of 650 m2 as a demonstration of low energy consumption case-study for the ...

Category: Engineering & project management, Educational & Academic Buildings, Rational Use of Energy

Pharmathen International Pharmaceutical Production Plant, Rodopi, Greece

Pharmaceutical production plant in Sapes, Rodopi, Greece. The plant consists of an office building, raw material delivery areas, product delivery ...

MAESTRAL HOTEL, Budva - Montenegro

Refurbishment of interior spaces and landscape areas of the hotel as well as design of a new extension to the complex, within the applying planning ...

PARK INN Hotel, Nairobi - Kenya

PARK INN Hotel located in Westlands area Nairobi, Kenya. The Hotel has the following characteristics: Three basements providing parking spaces for ...

Palm Valley Development, Nairobi, Kenya

"Palm Valley" development located in Runda, Nairobi, Kenya. The development has the following characteristics: Three building types:32 Town houses ...

Chronic Diseases Hospital of Amfilochia, Greece

Chronic disease hospital of the Etoloakarnania Prefecture, with a capacity of 100 beds, in Amfilochia, Greece. ...

DELTA (VIVARTIA) milk & juice industrial unit in Athens, Greece

Milk and fruit juices pasteurisation, storage and packaging plant located in Tavros, Attica. ...

MERIDIAN GARDENS KLAGON, Ghana

Residential Development located in Klagon – Tema, Ghana on Plot No AR/1897/2011.The developmenthas the following characteristics: 81 apartment ...

5* PARADISE Development, Kiambu County, Kenya

“Five Star Paradise Residential Development on plot L.R. No. 12825/186 in Kiambu County, Kenya” The development has the following ...

Star Channel new TV Station, Athens, Greece

Building Complex consisting of office buildings, 4 TV Studios and Radio Broadcasting Studio of the Nea Tileorasi SA – Star Channel Media company (9, ...

River West Commercial Complex (Mall & IKEA), Athens - Greece

Building complex for commercial use, in Athens, Greece, consisting of two buildings; one hosts an IKEA store of 25,000 m2 total surface; the second ...

National Centre for Scientific Research Demokritos, Athens, Greece

Specialised laboratory for the study on dioxins within the premises of the National Centre for Scientific Research Demokritos, situated in Agia ...

ONE BROOKSIDE DRIVE Development, Nairobi - Kenya

“One Brookside Drive” development located in Nairobi, Kenya. The development has the following characteristics: 1.    Four types of ...

"MARE WEST" Mall, Korinthos

The mall buildings’ layout is the result of the reconstruction of the existing buildings on a surface of 71,500 m² owned by the company “Emporiko ...

Athens 2004 Olympic Sports Hall in Galatsi, Athens, Greece

The sports hall is located in Galatsi Attica, Greece and was the venue, during the Athens 2004 Olympic Games, for Table Tennis and Rhythmic ...

PEPSICO - IVI, Viotia, Greece

Bottling industry plant (17,000 m2) in Inofita, Viotia, Greece. ...

Eden & Marina residential complexes in Paleo Faliro, Athens, Greece

Two residential complexes, namely EDEN and MARINA, of 125 residencies in Paleo Faliro, Athens, Greece. ...

PALAZZO Office Block, Nairobi - Kenya

“Palazzo” Office Block located opposite the Westlands round about in Nairobi, Kenya. The project has the following characteristics: 1.   ...

The Battle of Crete Memorial complex

Memorial monument, museum and conference centre for the "Battle of Crete", in Galatas, Chania, Greece. ...

Skaramangas Shipyards, Attica Region, Greece

Submarine production unit facilities and new buildings at the Skaramagas Shipyards in Attica, Greece. The project includes an industrial building of ...

Category: Engineering & project management, Infrastructure, Industrial Buildings

Kefalos Community on Kos island, Greece

Infrastructure networks for a settlement of 3,000 inhabitants in the Community of Kefalos on the island of Kos, Greece. ...

ATHINAIS Multi-purpose venue, in Athens, Greece

Renovation of an existing building complex (old factory and storehouses) and alteration of its use in a modern multi-purpose venue, in Votanikos, ...

Olympic Athletic Centre of Athens (Santiago Calatrava), Greece

The project for the aesthetic integration of the Athens Olympic Centre (OAKA), Greece was designed by the Spanish architect Santiago Calatrava. The ...

Apartments off Rhapta Road, Nairobi - Kenya

"Apartments off Rhapta Road” development located in Nairobi, Kenya. The development has the following characteristics: 1.    Three ...

Maroussi City Hall, Athens, Greece

Municipal Services building complex of the Municipality of Maroussi (over ground surface: 6,000 m², total surface: 12,000 m²), with underground ...

Category: Engineering & project management, Commercial & Office Buildings, Public Buildings

COSTA NAVARINO Integrated Tourist Development Zone of Messinia (POTA Messinia), of an area of 1,300,000 m² in the area of Romanos, Messinia, Greece. ...

Logistics Centre, Patras, Greece

Logistics Centre in the industrial region of Patras, Greece of Patras Logistics LTD. The logistics centre has a total area of 35,900 m² and comprises ...

I&M BANK Head Quarters, Nairobi - Kenya

Headquarters of the I&M Bank located in Nairobi, Kenya. The Building has the following characteristics: 1.    Four basements ...

PIRAEUS BANK, Bucharest, Romania

Piraeus Bank new Data Centre of 400 m² area in a Piraeus Bank existing building in Bucharest, Romania. ...

S&B Industrial Minerals, Athens, Greece

Bioclimatic building complex consisting of three underground areas of total surface of 13,094 m2 (parking lots, storage areas and E&M facilities) ...

COSTA NAVARINO Resort Complex, Messinia Region - Greece

Conference Centre of 1,200 people capacity in Romanos area, Messinia, Greece. ...

Agrolab industrial plant in Attica, Greece

Building complex in Attica, Greece. The building complex consists of laboratories, packaging facilities of agricultural supplies, agricultural ...

Project Management Services for the Construction of the new Warehouse in Popesti-Leordeni, Ilfov

The project is about a Logistics Center covering an area of 50,000 m2 which serves a chain of 175 supermarkets. The Logistics Center is located in ...

Category: Infrastructure, Logistics Centres

SPORTCAR SA Porsche building in Athens, Greece

SPORTCAR SA Porsche Dealer building (car display, customer service) in ...

ERASSINIO Hospital Centre, Attica, Greece

Erasinio Hospital Centre of Excellence in Oncology at Koropi, Athens, Greece specialized in diagnosis and treatment of neoplasmatic diseases, with a ...

The American School of Classical Studies, Athens, Greece

Extension of the Gennadius Library in Athens, Greece. The extension consisted of the construction of five new floors for offices and of a new 1,500 ...

Ηellenic Naval Academy, Piraeus, Greece

Laboratory building of the Hellenic Naval Academy in Piraeus, Greece. ...

Solar Village, Likovrissi, Greece

The solar village in Likovrissi, Athens, Greece consists of 435 apartments. This experimental project material¬ized the use of both active and ...

Olympic Village, Athens, Greece

The project concerns the design of mechanical and electrical installations of the Olympic Village in Athens.The Olympic Village, the largest of all ...

ELOUNDA BEACH and ELOUNDA BAY, Crete island - Greece

Partial renovations and extensions of the 5-star deluxe hotel complexes Elounda Beach and Elounda Bay Palace in Agios Nikolaos, Crete, Greece. The ...

Health Centre of the mutual health fund of the Personnel of Bank of Greece, Athens, Greece

Health Centre of the Mutual Health Fund of the Personnel of Bank of Greece. The building complex consists of a multi clinic and administrative ...

Business Reg No.: 324501000 

Copyright LDK 2018 – 2024 © All Rights Reserved

Website by : ClickMedia

• Investor Relations
• Client Login

Our Profile

• Our History
• Entrepreneurship
• Training and Mentorship
• Financial Literacy

Our Solutions

• Private Equity
• Real Estate
• Asset Managers
• Cytonn Money Market Fund
• Equity Fund
• Balanced Fund
• Cytonn High Yield Fund
• Cytonn African Financial Services Fund
• Capital Partners
• Structured Products
• Affordable Housing Investments Plan
• CHYS and CPN Updates

Markets We Serve

• High Net Worth
• Institutional
• Saccos and Chamas
• CEO Speeches

Research & Publications

• Testimonials
• Open to Talk
• Sponsorship
• WhistleBlower
• {{ searchResult.length }} results in {{ index }}
• {{ result.title }} {{ result.designation }} {{ result.author }} {{ result.category }} View

Kenya’s real estate and construction market has grown over the last 8-years, with its contribution to GDP increasing from 12.6% in 2010 to 14.1% in 2017, as per statistics from Kenya National Bureau of Statistics (KNBS). The growth has been fuelled primarily by:

• Demand as a result of rapid population growth at 2.6% p.a compared to the global average growth rate of 1.2% as at 2017 according to the World Bank,
• High rate of urbanization at 4.4% p.a, compared to the global average of 2.1%,
• Infrastructural development in various parts of the country, which has opened up areas for development and improved the ease of doing business in the country,
• Entrance of multi-national firms such as Wrigley and Volkswagen & Swarovski, who demand institutional grade commercial and residential real estate,
• Relatively high real estate developer returns of over 20.0% p.a. on average over the last 5- years, compared to an average of 13.2% p.a for traditional asset classes, and,
• Nairobi’s positioning as the regional hub for East Africa.

As the market peaks, however, there has been increased supply of office space, retail space and residential units in the upper segment of the market, against shrinking demand, resulting in increased competition among developers and thus subdued returns. In order to differentiate their products, we are now seeing more developers undertaking Mixed-Use Developments (MUDs), which integrate various uses (residential, commercial, hospitality, retail, etc.) in one so as to maximise land use whilst increasing uptake through creation of a live, work, play and invest environment for building occupants. This week, we look into MUDs in the Nairobi Metropolitan Area by covering the following:

• Introduction to Mixed-Use Developments,
• Advantages of Mixed-Use Developments,
• Limitations of Mixed-Use Developments,
• Performance of Mixed-Use Developments in the Nairobi Metropolitan Area, and
• Recommendations and Conclusions.

A Mixed-Use Development (MUD) refers to a real estate development containing more than one real estate theme. Such a development would, therefore, have 2 or more uses, that is, residential, retail, office, and hospitality, all in one location. MUDs are not a new trend in Kenya with several developments particularly in the commercial zones having a mix of office and retail space, while those in townships areas have retail space on the ground floors and residential areas on the upper floors. In the recent years, however, we have seen the emergence of large-scale integrated mixed-use developments, composed of extensive retail malls, Grade A office spaces, residential precincts with apartments and/or villas, restaurants, hotel rooms and serviced apartments. Some of the recently completed MUDs in the Nairobi Metropolitan Area include Garden City along the Thika Super Highway, Two Rivers along Limuru road, Le Mac in Westlands, NextGen along Mombasa road, Yaya centre in Kilimani, and 14 Riverside in Riverside; while some of those in the pipeline include Montave and Pinnacle Towers in Upper Hill, and Global Trade Center in Westlands.

The growing popularity of mixed-use developments is mainly driven by the following advantages;

• Higher Returns - According to our research, MUDs perform better, recording an average rental yield of 8.0% ( retail, offices and residential spaces in MUDs recording a rental yield of 8.5%, 8.2% and 5.6%, respectively ), compared to a market average of 7.5% for single-themed developments ( retail, offices and residential spaces recording a rental yield of 9.5%, 7.9% and 5.0%, respectively ),
• Operational Synergies - The various themes in an MUD can generate operational synergies whereby one’s performance complements the others. For instance, building residents will create a ready market for retail services while firms occupying office space are potential clients for hotel, restaurant and conferencing space in the hotel. As a result, improvement of performance of one theme leads to better performance in other themes,
• Risk Diversification - Having multiple components in the development creates multiple revenue streams that help to diversify the risk of a project. In case uptake for one of the themes is low, the developer or property manager will continue to receive revenues from the other themes. The developer can also opt to alter uses, depending on each theme’s performance; for example, underperforming residential units can be converted to office space if zoning regulations allow for it,
• Economies of Scale - MUDs enable effective use of space/land hence maximisation of returns while shared infrastructure and facilities such as lifts, parking, and lobbies result in savings on construction and operational costs, and,
• Greater Efficiency for Occupants - MUDs create an environment where occupants can live, work, play and invest all in one location, hence reducing time and cost incurred while commuting. By creating convenience, therefore, MUDs attract demand from both prospective homeowners and corporations.

Despite the highlighted benefits, Mixed-Use Developments have downsides, including;

• High Construction and Development Costs - MUDs are costly to construct attributable to the intricacy of the architectural designs aimed at ensuring functionality, proper interfacing across the incorporated uses and the overall aesthetic appeal of the project, soaring land prices in urban areas and lengthened time-frames of large-scale developments which results in higher financing costs,
• Cannibalisation Risk – If not well-planned, MUDs face the risk of cannibalisation due to having competing concepts in the same development such as serviced apartments and hotel, and,
• Congestion – If an MUD is constructed on a small piece of land, it may result in congestion causing problems such as noise transfer from commercial to residential areas and inadequacy of facilities such as parking spaces, making it less appealing for prospective residents/firms.

From the above, we can see that the success of a Mixed-Use Development significantly depends on how it is executed right from the site selection, concept design and user/tenant mix. Developers, therefore, need to identify suitable locations based on market demand and also establish how to strike the right balance between the incorporated uses in a Mixed-Use Development in order to achieve optimal returns.

We undertook market research on MUDs in the Nairobi Metropolitan Area to determine their returns and issue recommendations on the best areas to invest. We also compared returns in MUDs to single-themed developments. In our research, we focussed on projects with a Total Built Area (TBA) of at least 60,000 SQFT and analyzed the performance of the residential, commercial office and retail segments of Mixed-Use Projects. The key metrics we looked into include;

• Prices – This is a measure of how much developers are asking for sale units in the market,
• Rental Rates – This is the amount tenants pay per unit of space in a specific market. This will inform potential investors on the rental income they are likely to gain from investing in an MUD,
• Annual Uptake – This measures the number of units in a development that are sold out per annum. This allows the investor to appreciate the rate at which available units are sold over a specific period and gauge whether it is profitable to invest in a given area,
• Occupancy Rates -This measures the number of units or the size of the development that is let out, in order to inform on the expected rental yield of the building, and,
• Rental Yield - This measures the return on real estate property value, from the rental income collected. This informs potential investors on the return they are likely to get from a property and hence the time it will take for an investor to get back the money invested. This is calculated as ((Rent x Occupancy Rate x 12 months)/Price) X 100%

In our analysis of the MUD market performance in 2018, we will start by covering the general market performance in Nairobi per location then proceed to compare real estate themes in MUD versus single themed developments’ performance.

From our research, MUDs encompassing office, retail and residential themes have an average rental yield of 8.0%. MUDs in the Limuru Road and Karen nodes are the best performing, recording a rental yield of 9.6% and 9.4%, respectively. The performance is attributable to the fact that these developments are located in high-end neighbourhoods (Karen, Runda, Rosslyn, Kitisuru, among others) hosting Nairobi’s middle-end and high-end population, with higher purchasing power and who are thus willing to pay a premium for class and amenities provided. Areas characterized by traffic congestion and a low-income population with low purchasing power such as Mombasa road and Eastlands, are the worst performing nodes recording average rental yields of 5.7% and 5.4%, respectively.

The performance of the key nodes in the Nairobi Metropolitan Area is as summarized below:

All values in Kshs unless stated otherwise

We looked at the prices, rents and returns of each theme in mixed-use developments in comparison to the theme’s average performance in the market, to determine the return margin of investing in an MUD. The findings are as summarised below;

Retail space in mixed-use developments record an average rental yield of 8.5% with an average occupancy of 76.9%. This is 1.1% points and 4.3% percentage points lower than the market average at 9.5% yield and 81.2% occupancy. This indicates that retail space performs worse in an MUD context in comparison to being in isolation and we attribute this to competition from shopping centres and malls, strategically located in residential areas, making them easier to access. We, however, note that in destination mixed-use developments, retail space performs better due to the state-of-the-art facilities provided that attract clientele who are looking for an experience.

Below is a summary of the performance of retail space in MUDs versus market performance:

Source: Cytonn research

Commercial offices in mixed-use developments record higher rental yields of 8.2%, 0.3% points higher than the market average at 7.9%. This is attributable to high rental charges of Kshs 110.3/SQFT compared to the market average at Kshs 99.2/SQFT, given that they are mainly Grade A offices with state-of-the-art technical services provided such as high-quality elevators, fittings and automation systems and ample parking at a minimum ratio of 3:1000 (3 parking slots for every 1000 SQFT), which lack in Grade B and C offices, hence tenants are willing to pay a premium.

Below is a summary of the performance of commercial offices in MUDs versus market performance:

Incorporation of the residential theme in large scale integrated mixed-use developments in the Nairobi Metropolitan Area is growing in popularity, and we have seen this in developments such as Two Rivers along Limuru road, Garden City along Thika road and Nextgen along Mombasa road among others. Residential units in MUDs record higher prices at Kshs 168,343.5/SQM and rental yield at 5.6%, compared to the market average price at Kshs 127,895.3/SQM and rental yield at 5.0% due the convenience, that MUDs create, therefore, attract demand from prospective homeowners who are willing to pay a premium on the same.

Below is a summary of the performance of residential units in MUDs versus market performance:

Source: Cytonn Research

• Summary of Thematic Performance in MUDs in Comparison to General Market Performance

When we compare the average rental yields of themes in MUDs to the overall market performance for each theme, we find that office space and residential units in MUDs have higher rental yields at 8.2% and 5.6% compared to the market average at 7.9% and 5.0% mainly attributed to higher rents and prices charged due to amenities and facilities provided.

With an average weighted rental yield of 8.0%, ( 8.5% for retail space accounting for 30.9% of MUD lettable area on average, 8.2% for office space accounting for 58.1% of MUD lettable area on average and 5.6% for residential space accounting for 41.3% of MUD lettable area on average ) mixed-use developments have higher returns compared to market average at 7.5%. MUDs are, therefore, a viable investment mainly for office and residential spaces recording a high rental yield of 8.2% and 5.6%, 0.3% and 0.6% points, above the market average at 7.9% and 5.0%, respectively and minimal allocation to retail space. They are suitable for developers and investors looking to diversify their real estate portfolio, given that some themes such as office and retail having an oversupply of 4.7mn and 2.0mn SQFT space, respectively in Nairobi Metropolitan Area. The investment opportunity within the Nairobi Metropolitan Area is, thus, in areas such as Limuru road, Karen, Upperhill and Kilimani recording the highest rental yield returns of 9.7%, 9.4%, 8.7%, and 8.6%, respectively.

Subscribe to our Weekly Updates

Get reports and updates from Cytonn Investments about trends in the market and industries. Visit Cytonn Report

• P.O Box 20695 - 00200, Nairobi, Kenya
• Customer Care
• Cell +254(0) 709 101 200
• WhatsApp +254(0) 748 070 000
• Email: [email protected]
• General Inquiries
• Cell +254(0) 709 101 000
• Tel +254(0) 20 3929 000
• United States
• +1 (240) 368-6217
• Our Digital Platforms

• CySuites work spaces, Church Rd, Westlands, Nairobi, Kenya
• Suite 1150, 1775 Eye Street NW, USA, Washington DC 20006, USA
• Money Market Fund
• Affordable Housing Investment Plan
• RiverRun Estates
• Taraji Heights

• Rent Collection
• Cleaning Services
• Valuation Services

Mixed-use Developments in Kenya: All You Need To Know

Are you torn between starting residential, commercial, or industrial real estate? It’s overwhelming to decide what to create, mainly due to the different returns on investment with each type of real estate. As a result, most investors have decided to come up with a mixed-use property that serves at least two purposes.

Summary of the Article

Mixed-use properties have been rising recently in Kenya, especially in Nairobi metropolitan area. Chances are, residential estates should be near commercial real estate because the residents will need to visit retail stores frequently. That’s why investors have thought of combining residential and commercial real estate.

This guide will explain everything about mixed-use developments in Kenya and how you can succeed with the investment.

What is a Mixed-use Development?

A mixed-use development consists of single property with multiple purposes. For instance, you can combine residential with retail stores. It’s rare to get vacant mixed-use properties since it has many clients. 

These developments can consist of a wide area or just a few houses. The bottom line is that residential dwellings will be in the same area as commercial properties . 

The commonly used mixed-use development is commercial at the front and residential houses at the back; this setup is known as horizontal development.

Other investors prefer ground floors for commercial use, and the rest of the building accommodates residents; this setup is called vertical development.

Benefits of Mixed-use Properties 

• Proper management 

Once you have all your property in one place, it will be simple to manage. You won’t have to travel to different locations to collect data because it’s all in one place.

In addition, when doing repairs, it will be cheaper because you’ll pay for bulk services.

Furthermore, you’ll also be closer to your tenants, and you can answer questions with ease. For instance, if there is a water shortage, you can organize more water for your tenants without going to separate properties.

• Broad client base 

With mixed-use property, you will not stay long without tenants. If you don’t get a residential tenant, you’ll get a commercial one. 

In addition, since it’s an area serving a more significant population, more people would like to settle in places close to social amenities and retail shops. In addition, the business people would also like to set up a business in the area since there are ready customers.

5 Items to Consider Before Investing in Commercial Real Estate in Kenya

• Closer social amenities 

Nowadays, everyone likes to stay in places with schools, security, hospitals, proper transport, and communication channels.

When an area has lots of mixed-use developments, it will attract the establishment of better social amenities.

Furthermore, due to the high cost of living in the country, most people would prefer walking to and from work, school, hospitals, etc. At least, they’ll save some coins by doing so. And that’s a big reason they would prefer staying in an area serving all their needs. 

Areas with mixed-use properties like Athi River, Kitengela, Huruma, Kiambu, and Ruiru, among others, tend to develop faster than areas set for residential or commercial property alone.

Mixed-use property triggers the growth of small and medium businesses. As a result, your property returns grow from time to time.

• Less risk to investors 

You can survive with the booming side when one investment type goes down.

For instance, in 2020, most businesses closed down due to the pandemic . As a result, commercial real estate went down in terms of ROI. However, the residential sector was not affected that much. So, whoever had mixed-use property managed to pay their mortgage and bills using residential income.

Therefore, mixed-use property poses a lesser risk to the investor if one side subsides in returns.

• Higher returns 

Indeed, commercial property has higher returns because the charges are usually high. A single retail storeroom in Nairobi could cost above Ksh. 20,000, while a single residential house costs at least Ksh.3000. Such a huge difference. 

Mixed-use property owners gain from commercial and residential houses. And the overall ROI is usually higher than that of single-use properties.

Shortcomings of Mixed-use Property 

• They are very costly to set up 

Since you need two types of properties, you may have to dig deeper into your pockets. Whether you buy undeveloped land or a complete property, you’ll need a lot of money. In addition, the down payment is also huge. 

• Conflict of interest among the tenants 

Residential and commercial tenants may have different interests like cleanliness and usage of shared things like water and electricity.

As an investor, you’ll have a hard time reconciling tenant disputes, still due to congestion. The only sure way is to ensure everyone has their metered water and electricity. That will reduce conflicts during the usage of those amenities.

• In case of a fire breakup, you may lose. 

Fire breakups are common in congested areas. When little fire is not prevented from spreading, it can affect multiple properties, causing losses to owners.

However, insuring your property against such risks can help you. But once a regular income source is dormant, you can reconstruct it.

Is Mixed-use Property Investment a Good Idea?

Well, the benefits outdo the demerits, so yes, mixed-use is an excellent idea that can help you have huge returns.

You’ll also have a humble time managing all your property in one area.

10 Tips First-time Real Estate Investors Should Know

Frequently Asked Questions 

• What’s the main benefit of mixed-use development?

Diversification proves to be the main benefit of mixed-use investments. With mixed-use property, you will thrive, even when one side of the property is doing poorly.

• Why do people love mixed-use rentals?

People like places where they can access everything they’ll need to survive. That calls for more tenants in mixed-use areas. In addition, the residential part tends to be cheap compared to residence-only property.

• What comes under a mixed-use development?

Modern mixed-use properties have residential and commercial spaces such as retail stores, offices, industrial, hospitals, hotels, and other recreational areas.

Leave a Reply

You must be logged in to post a comment.

Compare Properties

Owning a home is a keystone of wealth… both financial affluence and emotional security.

• {{ result.title }} {{ result.author }} View
• No results were found...

Nairobi Metropolitan Area (NMA) Mixed Use Developments Report 2021, & Cytonn Weekly #46/2021

By Research Team, Nov 21, 2021

Source: Business Daily  

Liquidity:  

During the week, liquidity in the money markets tightened, with the average interbank rate increasing by 0.5% points to 5.2% from 4.7% recorded the previous week, partly attributable to tax remittances which offset Government payments. The average interbank volumes traded increased by 11.3% to Kshs 11.0 bn, from Kshs 9.9 bn recorded the previous week.  

Kenya Eurobonds:  

During the week, the yields on Eurobonds recorded mixed performance, with the 30-year bond issued in 2018 increasing by 0.1% points to 7.9%, from 7.8% recorded the previous week, while yields on the 12-year bond issued in 2021 declined by 0.1% to 6.4%, from 6.5% recorded the previous week. Yields on the 10-year bond issued in 2014, 10-year bond issued in 2018, 7-year bond issued in 2019 and 12-year bond issued in 2019 remained unchanged at 3.8%, 5.6%, 5.4% and 6.6%, respectively. Below is a summary of the performance:  

Kenya Shilling:  

During the week, the Kenyan shilling depreciated marginally by 0.3% against the US dollar to close the week at Kshs 112.2, from Kshs 111.8 recorded the previous week, mainly attributable to increased dollar demand from commodity and energy sector importers outweighing the supply of dollars from exporters. Key to note, these are the lowest lows that the Kenyan shilling has ever depreciated to against the dollar. On a YTD basis, the shilling has depreciated by 2.8% against the dollar, in comparison to the 7.7% depreciation recorded in 2020. We expect the shilling to remain under pressure for the remainder of 2021 as a result of:  

• Rising uncertainties in the global market due to the Coronavirus pandemic, which has seen investors continue to prefer holding their investments in dollars and other hard currencies and commodities,  
• Increased demand from merchandise traders as they beef up their hard currency positions in anticipation for more trading partners reopening their economies globally, and,  
• Rising global crude oil prices on the back of supply constraints at a time when demand is picking up with the easing of COVID-19 restrictions and as economies reopen.  

The shilling is however expected to be supported by:  

• The Forex reserves, currently at USD 8.9 bn (equivalent to 5.4-months of import cover), which is above the statutory requirement of maintaining at least 4.0-months of import cover, and the EAC region’s convergence criteria of 4.5-months of import cover. In addition, the reserves were boosted by the USD 1.0 bn proceeds from the Eurobond issued in July, 2021 coupled with the USD 407.0 mn IMF disbursement and the USD 130.0 mn World Bank loan financing received in June, 2021, and,   
• Improving diaspora remittances evidenced by a 28.2% y/y increase to USD 337.4 mn in October 2021, from USD 263.1 mn recorded over the same period in 2020, which has continued to cushion the shilling against further depreciation.

Weekly Highlights:  

• Fuel Prices  

During the week, the Energy and Petroleum Regulatory Authority (EPRA) released their monthly statement on the  maximum retail prices  in Kenya effective 15 th  November 2021 to 14 th  December 2021. Notably, fuel prices remained unchanged at Kshs 129.7 per litre for Super Petrol, Kshs 110.6 per litre for Diesel and Kshs 103.5 per litre for Kerosene. Below are the key take-outs from the statement:  

• The performance in fuel prices was attributable to:  
• The fuel subsidy program under the Petroleum Development Fund which resulted in subsidies of Kshs 13.8 on Super Petrol, Kshs 15.7 on Diesel and Kshs 11.6 on Kerosene,  
• Removal of suppliers margins of Kshs 6.3 on Super Petrol, Kshs 5.5 on Diesel and Kshs 7.7 on Kerosene, and,  
• The decline in the Free on Board (FOB) price of Murban crude oil in October 2021 by 5.1% to USD 69.7 per barrel, from USD 73.5 per barrel in September 2021.   
• The retention of fuel prices was despite:  
• An increase in the average landed costs of Super Petrol by 8.7% to USD 606.1 per cubic meter in October 2021, from USD 557.7 per cubic meter in September 2021,  
• Increase in the average landed costs of diesel by 11.2% to USD 561.1 per cubic meter in October 2021, from USD 504.7 per cubic meter in September 2021,  
• Increase in the average landed costs of Kerosene by 9.3% to USD 522.1 per cubic meter in October 2021 from USD 477.8 per cubic meter in September 2021, and,   
• Depreciation of the Kenyan shilling by 0.8% to Kshs 111.1 in October 2021, from Kshs 110.2 in September 2021.   

Global fuel prices have declined by 1.9% in the first two weeks of November 2021, but have increased by 61.4% on a YTD basis, to USD 80.8 from USD 50.2 at the end of 2020. The decline in global prices in November 2021 is attributable to reduced oil demand in Europe as a result of a spike in COVID-19 cases which has necessitated imposition of restrictions in some countries.   

Going forward, we expect muted pressure on the inflation basket as fuel prices which are among the major contributors to Kenya’s headline inflation remain constant following the Fuel Subsidy program. However, we believe the stabilization under the fuel subsidy program by the National Treasury will be unsustainable should the average landed costs of fuel keep rising. The National Treasury will also have to compensate the Oil Marketing companies and suppliers whose edges were decreased by 100.0% in the most recent review putting further strain on the program's viability.  

• Revenue and Net Exchequer for FY’2021/2022  

The National Treasury  gazetted  the revenue and net expenditures for the first four months of FY’2021/2022, ending 31 st  October 2021. Below is a summary of the performance:  

The key take-outs from the report include:   

• Total revenue collected as at the end of October 2021 amounted to Kshs 598.5 bn, equivalent to 33.7% of the original estimates of Kshs 1.8 tn and is 101.1% of the prorated estimates of Kshs 591.9 bn. Cumulatively, Tax revenues amounted to Kshs 548.4 bn, equivalent to 32.1% of the target of Kshs 1,707.4 bn and are 96.4% of the prorated estimates of Kshs 569.1 bn,   
• Total financing amounted to Kshs 375.7 bn, equivalent to 26.5% of the original estimates of Kshs 1,417.4 tn and is 79.5% of the prorated estimates of Kshs 472.5 bn. Additionally, domestic borrowing amounted to Kshs 360.8 bn, equivalent to 35.8% of the original estimates of Kshs 1.0 tn and is 107.3%   of the prorated estimates of Kshs 336.1 bn,  
• The total expenditure amounted to Kshs 906.9 bn, equivalent to 28.4% of the original estimates of Kshs 3,193.0 bn, and is 85.2% of the prorated expenditure estimates of Kshs 1.1 tn. Additionally, the net disbursements to recurrent expenditures came in at Kshs 343.2 bn, equivalent to 31.0% of the original estimates and 93.0% of the prorated estimates of Kshs 368.9 bn, and development expenditure amounted to Kshs 101.4 bn, equivalent to 26.0% of the original estimates of Kshs 389.2 bn and is 78.1% of the prorated estimates of Kshs 129.7 bn,  
• Consolidated Fund Services (CFS) Exchequer issues lagged behind their target of Kshs 1,327.2 bn after amounting to Kshs 369.8 bn, equivalent to 27.9% of the target, and are 83.6% of the prorated amount of Kshs 442.4 bn. The cumulative public debt servicing cost amounted to Kshs 323.2 bn which is 27.6% of the original estimates of Kshs 1,169.2 bn, and is 82.9% of the prorated estimates of Kshs 389.7 bn, and,  
• Total Borrowings as at the end of October 2021 amounted to Kshs 371.6 bn, equivalent to 26.8% of the Kshs 1,388.1 bn target and are 80.3% of the prorated estimates of Kshs 462.7 bn. The cumulative domestic borrowing target of Kshs 1.0 tn comprises of adjusted Net domestic borrowings of Kshs 661.6 bn and Internal Debt Redemptions (Roll-overs) of Kshs 346.8 bn.  

The strong revenue performance in the first four months of the current fiscal year is commendable and can be attributed to economic recovery from the continuous ease of COVID-19 containment measures coupled with effectiveness of the KRA in tax collection. Additionally, the implementation of the Finance Act 2021 which brought changes to the Excise Duty Tax, Income Tax as well as the Value Added Tax is set to expand the tax base and consequently enhance revenue collection.  

• Draft 2022 Budget Policy Statement  

During the week, the National Treasury released the  Draft 2022 Budget Policy Statement , projecting a 7.7% increase in the target Excise Duty for FY’2021/2022 to Kshs 259.6 bn, from Kshs 241.0 bn as highlighted in the original budget estimates. The increase in the Excise duty revenue collection target follows the publishing of the Legal Notice 217 of 2021, which allowed the Kenya Revenue Authority, (KRA) to adjust the specific rates of excise duty upwards by 5.0% in line with average annual inflation rate for the FY’2020/2021. The products set to be affected by the increase are consumer goods such as Alcoholic and non-alcoholic drinks including beer and spirits, tobacco products, chocolates and motorcycles that are not locally assembled. Key to note, Petroleum products were not affected by the adjustment due to a petition lodged at the High Court in September 2021 which is still pending determination. Other key take-outs from the report include;  

• Ordinary revenue to be collected by the KRA at the end of FY’2021/2022 is projected to increase by 1.4% to Kshs 1.80 tn, from Kshs 1.77 in the original estimates, following increase in taxes such as excise duty. In FY’2022’2023, the National Treasury projects to collect Kshs 2.1 tn in ordinary revenue, boosted by a projected growth in income tax of 22.0% to Kshs 1.0 tn from Kshs 0.8 tn,  
• Value Added Tax (VAT) projected estimates for FY’2021’2022 are projected to grow slightly by 0.9% to Kshs 477.1 bn, from Kshs 472.9 bn in the original estimates. However, in FY’2022’2023, VAT revenue is expected to increase by 22.6% to Kshs 584.7 bn from Kshs 477.1 bn,   
• Total expenditure estimates for FY’2021/2022 increased by 4.1% to Kshs 3.2 tn from Kshs 3.0 tn, mainly attributable to an 8.0% increase in interest payments on domestic and external loans projections to Kshs 605.3 bn, from Kshs 560.3 bn. In FY’2022/2023, total expenditure is projected to grow by 1.4% to Kshs 3.20 tn  from Kshs 3.15 tn in FY’2021/2022, and,  
• Fiscal deficit for FY’2021/2022 was projected to increase by 10.0% to a deficit of Kshs 1.1 tn from Kshs 1.0 tn in the previous estimates, attributable to the faster 4.1% growth in expenditures projections growth than Total revenue growth of 1.4%. In FY’2021’2022, the fiscal deficit is projected to decline significantly by 24.9% to Kshs 0.8 tn from Kshs 1.1 tn in FY’2021/20212 estimates.   

The increased revenue collection target to Kshs 2.4 tn for FY’2022/2023, from this fiscal year’s target of Kshs 2.1 tn was expected given expansion of the tax base following the implementation of the Finance Act 2021. The upwards adjustment for specific rates of excise duty is also expected to increase KRAs revenue collections. However, despite KRA's efforts to expand the tax base, we believe that the fiscal deficit will remain to be ever present due to the historical mismatch between revenue and expenditure.  

Rates in the fixed income market have remained relatively stable due to the sufficient levels of liquidity in the money markets. The government is 26.7% ahead of its prorated borrowing target of Kshs 265.9 bn having borrowed Kshs 337.6 bn of the Kshs 658.5 bn borrowing target for the FY’2021/2022. We expect a gradual economic recovery going into FY’2021/2022 as evidenced by KRAs collection of Kshs 598.5 bn in revenues during the first four months of the current fiscal year, which is equivalent to 101.1% of the prorated revenue collection target. However, despite the projected high budget deficit of 7.5% and the lower credit rating from S&P Global to 'B' from 'B+', we believe that the monetary support from the IMF and World Bank will mean that the interest rate environment may stabilize since the government will not be desperate for cash.  

Markets Performance  

During the week, the equities market was on a downward trajectory, with NASI, NSE 20 and NSE 25 declining by 1.8%, 1.4% and 1.3%, respectively, taking their YTD performance to gains of 10.8%, 1.1% and 9.5% for NASI, NSE 20 and NSE 25, respectively. The equities market performance was driven by losses recorded by large cap stocks such as EABL, Safaricom and Co-operative Bank of 3.2%, 2.4% and 2.0%, respectively. The decline was however mitigated by gains recorded by banking stocks such as KCB and ABSA which gained by 3.1% and 2.9%, respectively.  

During the week, equities turnover declined by 28.8% to USD 22.3 mn, from USD 31.3 mn recorded the previous week, taking the YTD turnover to USD 1.1 bn . Foreign investors remained net sellers, with a net selling position of USD 2.9 mn, from a net selling position of USD 7.6 mn recorded the previous week, taking the YTD net selling position to USD 38.9 mn.  

The market is currently trading at a price to earnings ratio (P/E) of 12.8x, 1.2% below the historical average of 12.9x, and a dividend yield of 3.4%, 0.6% points below the historical average of 4.0%.   This week’s P/E is the lowest it has been since August 2021. Key to note, NASI’s PEG ratio currently stands at 1.4x, an indication that the market is trading at a premium to its future earnings growth. Basically, a PEG ratio greater than 1.0x indicates the market may be overvalued while a PEG ratio less than 1.0x indicates that the market is undervalued.   Excluding Safaricom, which is currently 60.7% of the market, the market is trading at a P/E ratio of 11.8x and a PEG ratio of 1.3x. The current P/E valuation of 12.8x is 66.0% above the most recent trough valuation of 7.7x experienced in the first week of August 2020. The charts below indicate the historical P/E and dividend yields of the market.  

Weekly Highlight:  

• Guidelines on Buybacks for Listed Companies   

During the week, the Capital Market Authority (CMA)  released  guidelines on share buybacks for listed companies, following the issuance of proposed guidelines on share buy-backs, in June 2020, which have been in the process of revision following public participation. The guidelines are in line with  Part XVI, Section 447  of the Companies Act, 2015, that introduced a share buyback option for publicly traded companies and aims to enhance investor protection, promote liquidity and ensure transparency in share buyback transactions.   

Some of the key highlights of the guidelines include:   

• The listed firm intending to conduct a share buyback should ensure that its Articles of association allows the said firm to carry out share buybacks. Additionally, the proposed share buyback must be authorized by shareholders in a general meeting,  
• The company should avail a shareholder circular disclosing all material information that the shareholders of the listed firm and their professional advisers would reasonably require so as to make informed decisions on the acceptance or rejection of the proposed share buyback transaction. The disclosure should include; (i) reason for the buyback, (ii) number of shares to be bought back, (iii) method of effecting the buyback, (iv) impact of the share buyback on the company’s financial position, and, (v) validity period for the buyback once approval is given, amongst other disclosures,  
• The Authority can cancel any share buyback transaction if the said firm executes the deal 2 weeks prior to the publication of its half-yearly or annual financial statements; or after it has become aware of any material information which has not been made public and which if disclosed, could affect the price of the shares. Additionally, a buyback may be canceled or otherwise suspended if material information is announced within 14 days prior to the buyback being conducted,  
• The volume of the shares repurchased on any single day must not exceed 25.0% of the average daily trading volume for the four calendar weeks preceding the week of the purchase and must not be executed as to significantly affect the liquidity of the shares in question, and,  
• For on-market transactions, the maximum share buyback price shall be 10.0% above the weighted average price of the share 10 days prior to the day of the Board resolution of share buyback. The minimum share buyback price, on the other hand, shall be the nominal price of the shares or the prevailing market price of the shares at the time the resolution was approved by the shareholders.  

The new guidelines come after Nation Media Group (NMG) became the first listed company in the Nairobi Stock Exchange (NSE) to conduct a share buyback which ran from 28 th  June 2021 to 24 th  September 2021. As highlighted in our  Cytonn Q3’2021 market review , the share buyback saw NMG acquire 17.1 mn ordinary shares out of the targeted 20.7 mn ordinary shares, representing an 82.5% success rate. In our view, the move by CMA to issue guidelines on the share buybacks is commendable, as the guidelines provide clarity on the procedures and requirements for share buybacks. We expect more listed companies to conduct buybacks in the NSE, especially for companies whose prices and valuations are at historical lows. The 10.0% limit on the share buyback price will minimize the impact on a company's balance sheet by reducing the cash or debt outlay for financing the buyback. However, the cap on share buyback price could limit companies intending to repurchase their shares at a much higher price so as to support their undervalued share price.  

• CBK Credit Survey Report – Q3’2021  

During the week, the Central Bank of Kenya (CBK), released the Commercial Banks’  Credit Survey Report  for the quarter ended September 2021. The quarterly Credit Officer Survey is undertaken by the CBK to identify the potential drivers of credit risk in the banking sector. During the quarter, 38 operating commercial banks and 1 mortgage finance company participated in the Commercial Banks Credit Officer Survey. The report highlights that the banking sector’s loan book recorded an 8.5% y/y growth, with gross loans increasing to Kshs 3.2 tn in September 2021, from Kshs 2.9 tn in September 2020. On a q/q basis, the loan book increased by 2.5% from Kshs 3.1 tn in June 2021. Other key take-outs from the report include:  

• Profit before Tax (PBT) for the banking sector increased by 68.0% y/y to Kshs 49.1 bn in Q3’2021, from Kshs 29.2 bn in Q3’2020. Quarterly, however, Profit before Tax decreased by 2.9% to Kshs 49.1 bn in September 2021, from Kshs 50.5 bn in June 2021 attributable to the higher increase in operating expenses by 4.7%, compared to the 2.2% increase recorded by operating income. Additionally, Return on Assets decreased to 2.65% September 2021, from Kshs 2.71 tn in June 2021,  
• The aggregate balance sheet recorded a 10.6% y/y growth to Kshs 5.8 tn in Q3’2021, from Kshs 5.3 tn in Q3’2020 driven by an 8.5% increase in gross loans to Kshs 3.2 tn in Q3’2021, from Kshs 2.9 tn in Q3’2020. Quarterly, the balance sheet grew by 2.5% to Kshs 5.8 tn in September 2021, from Kshs 5.7 tn in June 2021,  
• Asset quality in the banking sector improved, with the Gross NPL ratio declining to 13.60% in Q3’2021, from 13.64% recorded in Q3’2020 and 14.0% recorded in June 2021. The improvement in asset quality during the quarter is attributable to a higher increase of 2.7% in gross loans in Q3’2021 compared to an increase of 0.1% recorded by non-performing loans in Q3’2021,   
• The capital adequacy remained favorable with the ratio increasing to 18.8% in September 2021, from 18.2% recorded in September 2020. However, capital adequacy marginally decreased to 18.8% in September 2021, from 18.9% in June 2021. The q/q performance was attributable to higher increase in the total risk weighted assets of 2.3%, compared to 1.5% increase in  total capital during the quarter, bringing the capital adequacy ratio to 18.8%, 4.4% points above the minimum statutory limit of 14.5%,  
• IFRS 9 implementation had an adverse effect on the banking sector’s capital adequacy as a result of increased provisioning due to the challenging business environment. Commercial banks have had to provide provisions for both incurred and expected credit losses, and,  
• Average liquidity in the banking sector increased to 56.7% in September 2021, from 53.3% in September 2020. Quarterly, however, liquidity marginally decreased to 56.7% in September 2021 from 56.8% in June 2021. This was 36.7% points above the minimum statutory ratio of 20.0%.   

Credit risk is expected to decline due to an improved business environment following the gradual reopening of the economy on the back of the easing of COVID-19 restrictions and increased vaccination rollout. This is evidenced by the commercial banks’ reduced loan loss provisioning, as highlighted in our  H1’2021 Banking report . The Kenyan Banking sector has showcased robust recovery efforts which have been boosted by an expansion in the loan book and diversification of income which has grown the banks’ bottom lines. The strong performance evidenced by the increased profits in Q3’2021 is expected to continue but may face risks such as increased cybersecurity threats emanating from the shift to digital banking. Credit risk still remains a concern given the discovery of new strains of the COVID-19 which could lead to reduced economic activity in the medium term.

Earnings Releases  

During the week, KCB Group, Standard Chartered Bank and Co-operative Bank released their Q3’2021 financial results. Below is a summary of their performance;  

Key take-outs from the earnings release include;  

• Core earnings per share rose by 131.4% to Kshs 7.8, from Kshs 3.4 in Q3’2020, in line with our projections of a 130.6% increase to Kshs 7.8. The performance was driven by a 15.6% growth in total operating income to Kshs 79.9 bn, from Kshs 69.1 bn in Q3’2020, and a 15.2% decline in total operating expenses to Kshs 44.1 bn, from Kshs 52.0 bn in Q3’2020. Notably, Loan Loss Provisions declined by 53.4% to Kshs 9.3 bn, from Kshs 20.0 bn in Q3’2020 attributable to the declining credit risk in the market on the back of increased business activities in 2021 driven by the gradual economic recovery,    
• Interest income grew by 16.2% to Kshs 73.5 bn, from Kshs 63.3 bn in Q3’2020, mainly driven by a 16.8% increase in interest income from loans and advances to Kshs 53.4 bn, from Kshs 45.8 bn in Q3’2020, coupled with a 12.4% increase in interest income from government securities to Kshs 18.9 bn, from Kshs 16.8 bn in Q3’2020,  
• The Yield on Interest-Earning Assets declined to 10.9%, from 11.4% recorded in Q3’2020, attributable to the faster 20.4% growth in Average Interest Earning Assets, which outpaced the 14.9% growth in trailing interest income,  
• Interest expense rose by 10.8% to Kshs 17.1 bn, from Kshs 15.4 bn in Q3’2020, following a 69.1% rise in Interest expense on deposits and placements to Kshs 2.4 bn, from Kshs 1.4 bn in Q3’2020, coupled with a 4.8% increase in interest expense on customer deposits to Kshs 14.7 bn, from Kshs 14.0 bn in Q3’2020. Cost of funds, on the other hand, declined marginally by 0.3% points to 2.6%, from 2.9% recorded in Q3’2020, following a faster 13.4% increase in average interest bearing liabilities, which outpaced the 7.7% increase in trailing interest expense,  
• Net Interest Margin (NIM) declined to 8.4%, from 8.7% in Q3’2020 due to the faster 20.4% growth in average interest-earning assets, which outpaced the 17.1% increase in trailing Net Interest Income,  
• Total operating expenses decreased by 15.2% to Kshs 44.1 bn, from Kshs 52.0 bn in Q3’2020, largely driven by a 53.4% decline in Loan Loss Provisions (LLP) to Kshs 9.3 bn, from Kshs 20.0 bn in Q3’2020. The reduced provision level was due to declining credit risk on the back of increased business activities in 2021 driven by the gradual economic recovery. Staff costs increased by 22.0% to Kshs 18.6 bn, from Kshs 15.2 bn in Q3’2020,  
• The balance sheet recorded an expansion as total assets grew by 15.5% to Kshs 1,122.5 bn, from Kshs 972.0 bn in Q3’2020. The growth was supported by a 12.9% loan book expansion to Kshs 651.8 bn, from Kshs 577.5 bn in Q3’2020, coupled with a 6.9% increase in government securities to Kshs 252.4 bn, from Kshs 236.2 bn in Q3’2020. The significant expansion in the balance sheet is also partly attributable to the acquisition of Banque Populaire du Rwanda (BPR) in August 2021. BPR Rwanda contributed Kshs 45.0 bn worth of assets in Q3’2021 to the Group,  
• Total liabilities rose by 14.6% to Kshs 958.1 bn, from Kshs 836.1 bn in Q3’2020, driven by a 60.3% increase in placements due to other banking institutions to Kshs 26.6 bn, from Kshs 16.6 bn in Q3’2020. Customer deposits increased as well by 11.2% to Kshs 859.1 bn, from Kshs 772.7 bn, with customer deposits from NBK amounting to Kshs 115.4 bn in Q3’2021,  
• Deposits per branch decreased by 18.5% to Kshs 1.8 bn, from Kshs 2.2 bn in Q3’2020, with the number of branches increasing to 491, from 360 in Q3’2020. The group acquired 137 branches in Rwanda following the acquisition of BPR Rwanda during the period, in addition to opening 1 branch in South Sudan. The group however closed 2 branches in Uganda and 5 branches in Kenya during the period,  
• Gross non-performing loans increased by 1.2% to Kshs 98.1 bn, from Kshs 97.0 bn in Q3’2020. The groups Asset Quality improved, with the NPL ratio declining to 13.7% in Q3’2021, from 15.3% in Q3’2020, attributable to the faster 12.9% growth in loans, which outpaced the 1.2% growth in Non-Performing Loans. The rise in gross non-performing loans was mainly attributable to the poor performance from the corporate segment, mortgage segment, MSME segment, and Check-Off loans which recorded NPL ratios of 17.9%, 10.7%, 9.1% and 2.8%, respectively,  
• Loan Loss Provisions (LLP) decreased 53.4% y/y to Kshs 9.3 bn in Q3’2021, from Kshs 20.0 bn in Q3’2020. The NPL coverage improved to 63.4% in Q3’2021, from 58.5% in Q3’2020, as general Loan Loss Provisions increased by 14.1% to Kshs 50.1 bn, from Kshs 43.9 bn in Q3’2020, and,  
• KCB Group remains sufficiently capitalized with a core capital to risk-weighted assets ratio of 17.3%, 6.8% points above the statutory requirement. In addition, the total capital to risk-weighted assets ratio came in at 20.6%, exceeding the statutory requirement by 6.1% points. Adjusting for IFRS 9, the core capital to risk-weighted assets stood at 17.4%, while total capital to risk-weighted assets came in at 20.7%.  

For a comprehensive analysis, please see our  KCB Group Q3’2021 Earnings Note .  

• Standard Chartered Bank   
• Core earnings per share increased by  33.7% to Kshs 16.9, from Kshs 12.6 recorded in Q3’2020 driven by a 7.8% increase in total operating income to Kshs 22.3 bn, from Kshs 20.7 bn recorded in Q3’2020, coupled with a 5.1% decline in total operating expenses to Kshs 13.4 bn, from Kshs 14.1 bn recorded in Q3’2020,  
• Interest income declined by 2.5% to Kshs 17.5 bn, from Kshs 19.9 bn in Q3’2020, driven by a 4.0% decline in interest income from government securities to Kshs 6.9 bn, from Kshs 7.2 bn in Q3’2020. The decline in interest income was however mitigated by a 1.6% growth in interest income from loans and advances to Kshs 9.5 bn, from Kshs 9.4 bn in Q3’2020,  
• The Yield on Interest-Earning Assets (YIEA), declined by 0.9% points to 8.0%, from 8.9% in Q3’2020, attributable to the faster 7.6% growth in the average interest earning assets, which outpaced the 3.6% decline in the trailing interest income. Trailing Interest Income refers to the performance of the interest income for the past 12 consecutive months,  
• Interest expense declined by 23.3% to Kshs 2.8 bn, from Kshs 3.6 bn in Q3’2020, following a 25.6% decline in interest expense on customer deposits to Kshs 2.5 bn, from Kshs 3.3 bn in Q3’2020. The decline was however weighed down by a 12.6% increase in interest expenses on deposits and placements with banking institutions to Kshs 57.2 mn, from Kshs 50.8 mn in Q3’2020. Cost of funds, on the other hand, declined by 0.6% points to 1.5%, from 2.1% in Q3’2020, owing to a 7.6% growth in average interest-bearing liabilities which outpaced the 25.2% decline in the trailing interest expense. Trailing interest expense refers to the performance of the interest expense for the past 12 consecutive months,  
• Net Interest Margin (NIM) declined to 6.7%, from 7.0% in Q3’2020 attributable to a faster 7.6% growth in average interest-earning assets, which outpaced the 2.1% increase in the trailing Net Interest Income (NII),  
• Total operating expenses declined by 5.1% to Kshs 13.4 bn in Q3’2021, from Kshs 14.1 bn in Q3’2020, mainly attributable to a 10.2% decline in Staff Costs to Kshs 4.9 bn, from Kshs 5.4 bn recorded in Q3’2020. Additionally, Loan Loss Provisions (LLPs) declined by 1.6% to Kshs 2.68 bn in Q3’2021, from Kshs 2.73 bn in Q3’2020 partly attributable to the improved business environment,  
• The balance sheet recorded an expansion as total assets grew by 5.2% to Kshs 330.7 bn in Q3’2021, from Kshs 314.4 bn in Q3’2020. This growth was largely driven by a 48.8% increase in placements from banking institutions to Kshs 69.3 bn, from Kshs 46.6 bn in Q3’2020, coupled with a 0.1% increase in the loan book to Kshs 131.74 bn, from Kshs 131.65 bn recorded in Q3’2020. The performance was however weighed down by a 6.8% decline in investments in government and other securities to Kshs 99.0 bn, from Kshs 106.2 bn recorded in Q3’2020,  
• Total liabilities rose by 5.1% to Kshs 277.6 bn, from Kshs 264.2 bn in Q3’2020 driven by a 38.0% increase in Placements held to Kshs 2.8 bn in Q3’2021, from Kshs 2.0 bn in Q3’2020. Customer deposits increased by 6.4% to Kshs 258.4 bn, from Kshs 242.8 bn in Q3’2020,   
• Deposits per branch rose by 6.4% to Kshs 7.2 bn, from Kshs 6.7 bn in Q3’2020 with the number of branches remaining unchanged at 36,  
• Gross Non-Performing Loans (NPLs) increased by 4.8% to Kshs 23.0 bn in Q3’2021, from Kshs 22.0 bn recorded in Q3’2020. Consequently, the NPL ratio rose to 15.3%, from 14.8% recorded in Q3’2020. The Asset Quality deterioration is attributable to the faster 4.8% growth in Gross Non-Performing Loans (NPLs), compared to the relatively slower 1.3% increase in gross loans,  
• General Loan Loss Provisions increased by 16.8% to Kshs 9.8 bn, from Kshs 8.4 bn in Q3’2020. The NPL coverage thus increased to 82.8%, from 78.2% in Q3’2020, as the provisions (after adding back interest suspense) increased by 10.9% in Q3’2021, outpacing the 4.8% rise in the Gross Non-Performing Loans during the same period. The increase in the NPL Coverage to 82.8% in Q3’2021, from 78.2% in Q3’2020, suggests sufficient provisioning, and,  
• Standard Chartered is currently sufficiently capitalized with a core capital to risk-weighted assets ratio of 15.6%, 5.1% points above the statutory requirement. In addition, the total capital to risk-weighted assets ratio was 17.7%, exceeding the statutory requirement by 3.2% points. Adjusting for IFRS 9, the core capital to risk-weighted assets stood at 15.6% while total capital to risk-weighted assets came in at 17.7%.  

For a comprehensive analysis, please see our  SCBK Q3’2021 Earnings Note .  

• Co-operative Bank of Kenya  
• Core earnings per share increased by 18.0% to Kshs 1.7 in Q3’2021, from Kshs 1.4 in Q3’2020, not in line with our projections of a 12.4% increase to Kshs 1.6. The performance was driven by a 19.2% increase in total operating income to Kshs 44.4 bn in Q3’2021, from Kshs 37.2 bn in Q3’2020, despite a similar increase of 19.2% in the total operating expenses to Kshs 28.0 bn in Q3’2021, from Kshs 23.5 bn in Q3’2020,  
• Interest income rose by 21.6% to Kshs 39.6 bn in Q3’2021, from Kshs 32.6 bn in Q3’2020 driven by a 40.3% increase in interest income from government securities to Kshs 13.8 bn, from Kshs 9.8 bn in Q3’2020, coupled with a 14.0% rise in interest income from loans and advances to Kshs 25.4 bn, from Kshs 22.3 bn in Q3’2020. This growth was however weighed down by a 24.1% decline in interest income from deposits with other financial institutions to Kshs 0.3 bn in Q3’2021, from Kshs 0.4 bn in Q3’2020,   
• The Yield on Interest-Earning Assets (YIEA) increased to 11.5%, from 10.9% in Q3’2020 due to the faster 22.0% growth in trailing interest income, which outpaced the 15.5% growth in the average interest-earning assets,  
• Interest expense increased by 22.4% to Kshs 10.9 bn in Q3’2021, from Kshs 8.9 bn in Q3’2020, largely due to a 26.7% rise in interest expense from customer deposits to Kshs 9.8 bn, from Kshs 7.8 bn in Q3’2020. This was however mitigated by a 7.6% decline in other interest expenses to Kshs 1.0 bn in Q3’2021, from Kshs 1.1 bn in Q3’2020. As such, Cost of Funds increased to 3.3%, from 3.2% in Q3’2020, owing to the faster 20.6% increase in trailing interest expense, compared to the 15.0% rise in the average interest-bearing liabilities,  
• Net Interest Margin (NIM) increased to 8.5%, from 8.0% in Q3’2020, attributable to the 22.5% growth of trailing Net Interest Income (NII), which outpaced the 15.5% growth in average interest-earning assets,  
• Total operating expenses rose by 19.2% to Kshs 28.0 bn in Q3’2021, from Kshs 23.5 bn in Q3’2020, largely driven by the 50.3% rise in Loan Loss Provisions (LLP) to Kshs 6.0 bn, from Kshs 4.0 bn in Q3’2020. The increased provisioning level is mainly attributable to the lender increasing its coverage for the high Non-Performing Loans from Kingdom Bank, which stood at Kshs 6.4 bn as of Q3’2021. On the other hand, Staff costs increased by 3.6% to Kshs 10.0 bn, from Kshs 9.7 bn in Q3’2020,  
• The balance sheet recorded an expansion as total assets grew by 16.0% to Kshs 592.9 bn in Q3’2021, from Kshs 510.9 bn in Q3’2020, mainly attributable to the 35.9% growth in government securities to Kshs 193.3 bn, from Kshs 142.3 bn, coupled with a 7.8% growth in net loans and advances to Kshs 306.3 bn in Q3’2021, from Kshs 284.2 n in Q3’2020. The increase in allocation to government securities shows the bank’s cautious lending strategy considering the deteriorating asset quality, as evidenced by the bank’s NPL ratio rising to 14.6% in Q3’2021 from 13.2% in Q3’2020,   
• Total liabilities grew by 16.4% to Kshs 497.5 bn, from Kshs 427.3 bn in Q3’2020, which was largely attributable to a 12.0% rise in customer deposits to Kshs 420.4 bn in Q3’2021, from Kshs 375.5 bn in Q3’2020,   
• Deposits per branch increased by 0.6% to Kshs 2.38 bn, from Kshs 2.36 bn in Q3’2020, as the number of branches increased by 18 branches to 177 from 159 branches in Q3’2020, as a result of the acquisition of Kingdom Bank which contributed 17 branches to the total branch count,  
• Gross Non-Performing Loans (NPLs) increased by 23.2% to Kshs 49.5 bn in Q3’2021, from Kshs 40.2 bn in Q3’2020. The NPL ratio rose to 14.6% in Q3’2021, from 13.2% in Q3’2020, owing to the faster 23.2% growth in gross non-performing loans compared to the 11.3% growth in gross loans,  
• The NPL coverage ratio consequently improved to 65.5% in Q3’2021, from 50.1% in Q3’2020, due to the faster 81.1% growth in General Loan Loss Provisions which outpaced the 23.2% growth in Gross Non-Performing Loans (NPLs), and,   
• Co-operative Bank remains sufficiently capitalized with a core capital to risk-weighted assets ratio of 15.0%, 4.5% points above the statutory requirement of 10.5%. Also, the total capital to risk-weighted assets ratio came in at 16.5%, exceeding the statutory requirement of 14.5% by 2.0% points. Adjusting for IFRS 9, the core capital to risk-weighted assets stood at 12.5%, while total capital to risk-weighted assets came in at 14.0%.   

For a comprehensive analysis, please see our  Co-operative Bank Q3’2021 Earnings Note .

Asset Quality  

The table below is a summary of the asset quality for the companies that have released  

Key take-outs from the table include;  

• Asset quality for the listed banks that have released improved during the period, with the weighted average NPL ratio declining marginally by 0.2% points to a market cap weighted average of 12.2%, from an average of 12.4% for the listed banking sector in Q3’2020. The improvement in asset quality is attributable to declining credit risk on the back of increased business activities in 2021 driven by the gradual economic recovery, and,  
• NPL Coverage for the listed banks increased to a market cap weighted average of 64.6% in Q3’2021, from 59.2% recorded in Q3’2020, as the banks increased their provisioning levels.   

Summary Performance  

The table below highlights the performance of the banks that have released so far, showing the performance using several metrics, and the key take-outs of the performance;  

Key takeaways from the table above include:  

• The listed banks that have released recorded an 81.3% weighted average growth in core Earnings per Share (EPS), compared to a weighted average decline of 32.4% in Q3’2020 for the listed banking sector. The performance is however largely skewed by the strong performance from KCB and Equity Group,  
• The Banks have recorded a weighted average deposit growth of 17.3%, slower than the 23.1% growth recorded in Q3’2020,  
• Interest expense grew at a faster pace, by 23.5%, compared to the 8.2% growth in Q3’2020, while cost of funds declined, coming in at a weighted average of 2.5% in Q3’2021, from 2.9% in Q3’2020, owing to the faster growth in average interest-bearing liabilities, an indication that the listed banks were able to mobilize cheaper deposits,  
• Average loan growth came in at 15.1%, marginally higher than the 15.0% growth recorded in Q3’2020. The loan growth was however slower than the 18.0% growth in government securities, an indication of the banks continued preference to investing in Government securities compared to lending to individuals and businesses,  
• Interest income grew by 20.4%, compared to a growth of 10.8% recorded in Q3’2020. Notably, the weighted average Yield on Interest Earning Assets (YIEA) for the four banks increased to 10.1%, from the 9.5% recorded in Q3’2020 for the listed banking sector, an indication of the increased allocation to higher-yielding assets by the sector during the period. Consequently, the Net Interest Margin (NIM) now stands at 7.6%, 0.6% points higher than the 7.0% recorded in Q3’2020 for the whole listed banking sector, and,   
• Non-Funded Income grew by 19.9%, compared to the 2.1% growth recorded in Q3’2020. This can be attributable to the faster growth in the fees and commission which grew by 18.2% compared to a decline of 7.9% in Q3’2020, following the expiry of the waiver on fees on mobile transactions.   

Universe of Coverage  

We are “Neutral” on the Equities markets in the short term. With the market currently trading at a premium to its future growth (PEG Ratio at 1.4x), we believe that investors should reposition towards companies with a strong earnings growth and are trading at discounts to their intrinsic value. We expect the discovery of new COVID-19 variants coupled with slow vaccine rollout in developing economies to continue weighing down the economic outlook. On the upside, we believe that the recent relaxation of lockdown measures in the country will lead to improved investor sentiments in the economy.  

• Real Estate
• Industry Reports  

During the week, Hass Consult, a Real Estate Development and Consultancy firm, released the  House Price Index Q3’2021 , a report highlighting the performance of Real Estate Residential properties in the Nairobi Metropolitan Area (NMA) in Q3’2021. The key take outs are as outlined below;  

• Overall, residential properties within the Nairobi Metropolitan Area recorded a 1.0% q/q price appreciation and a 1.1% y/y price correction. Rents remained relatively stable over the review period, experiencing a marginal 0.1% q/q increase,   
• Detached units recorded the highest q/q price appreciation at 1.7% attributable to the high demand in Satellite Towns such as Ruiru, as the units  tend to be on more spacious parcels than similar detached units within the Nairobi Suburbs. A partments recorded a q/q price correction of 0.7%, attributable to huge price corrections in areas such as Westlands and Kileleshwa at 2.5% and 2.2%, respectively,  
• In the Suburbs, residential properties in Langata recorded the highest q/q price appreciation at 2.1%, while Runda recorded the lowest q/q performance with a price correction of 1.3%. Langata still recorded the highest y/y price appreciation at 11.9% with a 1.9% decline in y/y rental returns, confirming the area as more of a buyer than a renter’s market. Donholm recorded the lowest y/y performance with a 3.6% price correction,  
• In the Satellite Towns, residential properties in Ongata Rongai recorded the highest q/q price appreciation of 2.7% while Juja recorded the lowest performance with a q/q price correction of 2.1%. In terms of annual performance, Ruiru was the best performing node with a price appreciation of 7.7% while Juja recorded the lowest performance with a y/y price correction of 7.5%, and,   
• Notably, property prices along the touchpoints of the Nairobi Express Way such as Mlolongo, Athi River and Syokimau recorded a q/q price appreciation of 1.9%, 1.8% and 0.1%, respectively. This indicates that buyers expect a rise in prices when the project is completed and opt to enter the market at the current lower prices.  

This report is in line with our  Cytonn Q3’2021 Markets Review Report , indicating that overall y/y property prices in the Nairobi Metropolitan Area  improved by 0.8%. This performance is attributable to the gradual economic recovery, supported by the return to normalcy of general economic activities thereby increasing revenues and subsequent investments in Real Estate markets.  

Hass Consult, also released the  Land Price Index Q3’2021 , a report highlighting the performance of the Land Sector in the Nairobi Metropolitan Area in Q3’2021. Key take outs from the report are;  

• Overall, land prices in the Nairobi Metropolitan Area appreciated on a q/q and y/y basis by 0.3% and 0.8%, respectively. This is attributable to major infrastructure projects in the Nairobi Metropolitan Area such as the Nairobi Express Way and the Western Bypass, leading to increased demand for land along the touchpoints of the development projects,  
• Satellite Towns continued to lead in average price appreciation posting a q/q and y/y price appreciation of 2.5% and 5.6%. Affordability and availability of land triggered the investors return to Satellite Towns at a faster rate than in the Suburbs. In this category, Kiserian recorded the highest   q/q and y/y increase in land prices at 5.3% and 18.3%, respectively. Ruaka on the other hand, posted a q/q price correction of 0.2%, as developer demand declined with investors adopting a wait and see approach considering the current huge supply of units with others in the pipeline, and the expectations that infrastructure developments such as the Western Bypass may open up other areas for investment   
• The Nairobi suburbs recorded a q/q and y/y price appreciation of 0.5% and 1.4%, respectively. In this category, Land in Spring Valley recorded the highest q/q price appreciation at 2.2% while land in Loresho recorded the lowest performance q/q, with a price correction of 1.3%. In terms of annual performance, land in Nyari recorded the highest y/y price appreciation at 7.2% while that in Riverside recorded the highest y/y price correction of 5.1%, and,  
• Overall, Kilimani recorded the highest average land value per acre at Kshs 413.1 mn while Kiserian recorded the lowest average land value per acre at Kshs 8.7 mn per acre compared to a market average of Kshs 190.5 mn per acre in the Nairobi Metropolitan Area.  

This report is in line with our  Cytonn Q3’2021 Markets Review Report , indicating that overall land prices in the Nairobi Metropolitan Area appreciated by  an average of 1.7% y/y, in Q3’2021. According to the report, land prices in the Satellite towns realized the highest capital appreciation at 4.5% as a result of availability, affordability and prospect for development. This performance reiterates the investor confidence in land as a stable investment asset class.   

Additionally during the week, Knight Frank, a Real Estate Consultancy firm, released the  Africa Office Market Dashboard Report- Q3’2021 , a report highlighting the performance of commercial office sector in different African Cities for the Q3’2021. The key take outs from the report are as follows;  

• Major cities in Africa recorded a 49.0% q/q increase in office demand in Q3’2021 attributable to rising levels of investment  as investors moved to deploy capital amassed throughout the course of the pandemic,  
• Lagos, Nigeria, recorded the highest rental rates at Kshs 7,011 (USD 62.5) per SQM attributable to a strong occupier demand majorly from the vibrant tech sector supported by the high Fintech start-ups,  
• Harare, Zimbabwe recorded the lowest rental rates at Kshs 785 (USD 7.0) per SQM attributable to  occupier flight to suburban offices from the CBD, with businesses keen on occupying high-quality, convenient and affordable space away from the City,  and,  
• Nairobi City recorded the highest q/q increase in office asking rents by 9.0% to Kshs 1,458 (USD 13.0), from Kshs 1,324 (USD 11.8) per SQM,  leading to a 30.0% market share of the overall office requirements recorded across Africa during Q3’2021. This is attributable to the post-COVID economic expansion currently underway in Kenya coupled with a stable, but steady return of occupiers. This increase in demand has driven occupancy levels up by 3.0% points to 77.0% in Q3’2021, from 74.0% in Q2’2021.  

The table below indicates the summary of the 10 cities with the highest rent rates in Africa – Q3’2021;  

Source: Knight Frank Report NB: 1 USD= Kshs  112.2 as at 19/11/2021  

The table below indicates the summary of the 10 cities with the lowest office rent rates in Africa – Q3’2021 ;  

Source: Knight Frank Report NB: 1 USD= Kshs 112.2 as at 19/11/2021  

We expect uptake of offices to increase marginally driven by the resumption of businesses activities following the reopening the economy. However, the sector’s performance is expected to be weighed down by the current oversupply of offices in the Nairobi Metropolitan Area market  at 7.3  mn  SQFT as at 2021,  and, the adoption of online meetings and work from home as a continuing norm in most companies.  

• Infrastructure Sector  

During the week, Kenya Urban Roads Authority (KURA) announced the commencement of the conversion of the 32.0 Km Eastern Bypass into a dual carriage way at a cost of Kshs 12.5 bn. The road will be constructed by China Community Construction Company Limited and is expected to be completed by 2023. Upon completion, the road will link Mombasa Road to the Thika Superhighway through City Cabanas, Pipeline, Njiru, and Ruiru. The road is expected to:  

• Ease traffic congestion along the busy Mombasa Road by linking motorists from the Jomo Kenyatta International Airport and Mombasa-Nairobi highway to Thika Superhighway without passing through the CBD,  
• Boost Real Estate investment along the Satellite Towns touchpoints such as Utawala and Ruiru through enhanced investor and client accessibility,  
• Strategically serve as a link point to the planned Kshs 500.0 bn Northlands City Project in Ruiru, and,   
• Boost trade activities along the region due to increased population residing and transiting through the areas.   

The government continues to show a lot of commitment for infrastructure development in the country with current major pipeline projects in the Nairobi Metropolitan Area being the Nairobi Express Way which is 68.0% complete, and the Western Bypass (the Bypass will connect the towns of Kikuyu and Ruaka). The government has borrowed both internally by issuing infrastructure bonds, and externally through loans from countries such as China and Korea in order to finance  FY’2021/2022  infrastructure budget at Kshs 182.5 bn, a 0.6% increase from Kshs 181.4 bn allocation for FY’2020/2021 . We therefore expect these projects to be done to completion and open up more areas for investments through enhanced accessibility.  

The graph below shows the budget allocation  to the infrastructure sector over the last nine financial years:  

Source: National Treasury

The government’s continued focus on initiation and completion of infrastructure developments is expected to support the realization of the Vision 2030 Agenda on  developing quality, safe and adequate roads to make Kenya an intra-regional hub for trade in East Africa.  

• REIT Performance  

During the week, Fahari I-REIT declined by 2.0% to close at Kshs 6.8 per share, from Kshs 7.0 per share recorded the previous week. On a YTD basis the REIT has gained by 21.3% from the Kshs 5.6 recorded at the beginning of the year. The REIT’s closing price also represented a 65.8% Inception to Date (ITD) loss in performance, from the listing price of Kshs 20.0 per share. Additionally, latest data from  NSE Unquoted Securities Platform (USP)  show that the Acorn  DREIT closed the week at Kshs 20.2 while the I-REIT closed at Kshs 20.6 per unit, gaining by 0.9% and 3.1%, respectively, from the Kshs 20.0 Inception price. Volumes traded for D-REIT and the I-REIT were at 5.4 mn and 12.3 mn with a turnover of Kshs 108.9 mn and Kshs 254.1 mn, respectively.  

The Kenyan REIT market continues to record subdued performance, forming a mere 0.04% of the total market cap compared to the REIT Market in South Africa at 1.6% of the total market capitalization. This is due to constraining by factors such as i) lack of general knowledge about the REIT market and products, ii) high minimum investment amounts set at Kshs 5.0 mn for the D-REIT which 100x the medium income at Kshs 50,000, iii) lengthy regulatory processes discouraging promoters, and, iv) few REIT Trustees currently at 3, due to the high minimum requirements at Kshs 100.0 mn.  The graph below shows Fahari I-REIT’s performance from November 2015 to November 2021:  

We expect the real estate sector to be supported by  i ) the reopening of the economy boosting property and commercial office prices as demand improves, ii) investor confidence in land as a stable investment, and, iii) the government’s continued support for infrastructure thus boosting investments through enhanced accessibility and sustainable transportation services. However, the subdued REIT performance is expected to constrain the performance of the sector.  

Focus of the Week : Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report 2021

In December 2020, we released the  Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report-2020 , which highlighted that Mixed-Use Developments (MUDs) recorded an average rental yield of 6.9%, 0.1% points higher than the respective single use Retail, Commercial Office and Residential themes with 6.8% in 2020. The relatively better performance by MUDs compared to single-use developments was attributed to the prime locations mostly serving the high and growing middle income class, coupled with the concept’s convenience that incorporates working, shopping and living spaces.  

This week we update our report with the 2021 market research that was conducted in 7 nodes within the Nairobi Metropolitan Area (NMA), in order to determine the market performance of MUDs against the market performance of the Residential, Commercial Office and Retail sectors. Therefore, this topical will cover the following:   

• Overview of Mixed-Use Developments   
• Mixed-Use Developments Performance Summary in 2021    
• Mixed-Use Developments Investment Opportunity and Outlook   

Section I:  Overview of Mixed-Use Developments   

As a recap, a Mixed-Use Development (MUD) refers to an urban development that incorporates more than one Real Estate theme. This therefore means that a single development project will serve more than one purpose, that is, residential, commercial, retail, and, hospitality purposes, all at the same location. Due to the integration, MUDs offer benefits such as easier access to amenities and services, residential and working spaces all in one location.   

Some of the factors that have been driving the growth of MUDs include;  

• Convenience:  Mixed-Use Developments are more convenient and preferred given that the development mix creates an upscale living environment with easy access to work places, retail stores, and/or, residential areas,  
• Positive demographics : Kenya’s relatively high urbanization and population growth rates of 4.0%  p.a  and 2.3%  p.a , respectively, against the world’s 1.8%  p.a  and 1.0%  p.a , respectively, as at 2020, has also accelerated the growth and performance of MUDs through increased demand for the spaces,    
• Relatively High Returns: MUDs offer operational synergies due to incorporation of different Real Estate themes hence enabling investors to maximize returns, either through Rental income or Capital appreciation. In addition to this, most developments are situated in superior locations with the capability to attract prospective clients and in return generate relatively higher returns,
• Risks Diversification : Overall, investments in MUDs provides diversification to risk of any one asset class that may be negatively affected i.e. by market forces such as low uptake or demand in specific themes, and,  
• Maximum Use of Land : Due to the scarcity of suitable land particularly in the urban areas as a result of increasing population and urbanization growth rates, MUDs ensure efficient use of the available land due to the incorporation of the different asset classes in one project and location.  

Despite the aforementioned supporting factors, Mixed- Use Developments face various challenges such as:   

• Project Complexity:  The complex nature of MUDs in comparison to the single use developments poses risks such as financial losses. This may lead to losses of returns to investors if not well executed, as they require more critical details and controls in addition to being well-planned and managed in order to be successful, and,  
• High Development Costs:  Due to the need to incorporate the various Real Estate themes, funding of MUD project poses a challenge due to the high development costs required to plan and implement the projects.   

Section II:  Mixed-Use Developments Performance Summary in 2021   

• Summary of Thematic Performance in Comparison to General Market Performance 

Mixed-Use Developments recorded an average rental yield of 7.2% in 2021, 0.7% points higher than the respective single use themes which recorded average rental yield of 6.5% in the similar period. The relatively better performance was mainly attributed to; i) an improved business environment, ii) strategic and prime locations of the developments with the capability to attract prospective clients, and, iii) preference by target clients due to their convenience hence improved demand and returns to investors. The retail and commercial office theme in the MUDs recorded a 1.3% and 0.2% points increase in the average rental yield to 8.4% and 7.1%, respectively in 2021, from 7.1% and 6.9% in 2020. This was mainly due to an improved business environment leading to increased demand and uptake of spaces. For the Residential theme in the MUDs, the average rental yield declined by 0.3% points to 6.0% in 2021, from 6.3% in 2020, attributed to other landlords still offering discounts in a bid to attract more tenants as well as retaining the existing ones. Additionally, the Retail, Commercial Office and Residential themes in the MUDs performed better in 2021 when compared to single Retail, Commercial Office and Residential themes which realized rental yields of 7.8%, 6.6%% and 5.2%, respectively in 2021. This was attributed to their incorporated live, work and play lifestyle thus more preferred, coupled with the adequate amenities available leading to their increased demand.  

The table below shows the performance of single-use and mixed-use development themes between 2020 and 2021;   

Source: Cytonn Research 2021    

• Mixed-Use Developments Performance per Node    

Karen was the best performing node with an average MUD rental yield of 8.7%, 1.5% points higher than the market average of 7.2% in 2021. In terms of respective performance of the MUD themes in Karen; Retail and Office themes recorded average rental yields of 8.8%, and 9.0%, respectively, 0.4%, and 1.9% points higher than the market average of 8.4%, and 7.1%, respectively. The remarkable performance was largely attributed to; i) the prime developments fetching higher rates, and, ii) the adequate amenities and infrastructure servicing the area.  

Eastlands was the worst performing node with the average MUD rental yield coming in at 5.1%, 2.1% points lower than the market average of 7.2%. The respective themes i.e. Retail, commercial office and Residential sectors recorded average rental yield of 5.5%, 5.0% and 4.2%, respectively, 2.9%, 2.1% and 0.8% points lower than the market average of 8.4%, 7.1% and 6.0%, respectively. The poor performance was mainly attributed to low quality developments fetching lower rents thus affecting the overall yields, as well as inadequate amenities and infrastructure servicing the area.   

The table below shows the performance of Mixed-Use Developments by node in 2021;

(All Values in Kshs Unless Stated Otherwise)  

Source: Cytonn Research 2021   

• Performance of Real Estate Themes in MUDs versus Single-themed Developments’ Performance

In our Mixed-Use Development analysis, we looked into the performance of the retail, commercial office and residential themes:

• Retail Space   

The average rental yield of retail spaces in Mixed-Use Developments came in at 8.4% in 2021, 0.6% points higher than single use retail developments that realized an average rental yield of 7.8%. This was mainly attributed to the higher rental rates that MUDs generated at Kshs 170 per SQFT when compared to Kshs 168 per SQFT recorded for the single-use retail spaces. Moreover, the remarkable performance for the MUDs was attributed to their higher preference and demand resulting from their convenience as one-stop centers for consumers living and working in the area.   

Westlands was the best performing node with the average rental yield at 9.5%, 1.1% points higher than the market average of 8.4%. This was mainly driven by; i) the presence of high and middle income earning residents with greater purchasing power, ii) relatively higher rental rates and prices fetching higher returns, and iii) adequate amenities and infrastructure servicing the developments. Contrary to this, Eastlands was the worst performing node with an average rental yield of 5.5%, 2.9% points lower than the market average of 8.4%, as a result of the higher competition of informal retail spaces, and the low supply of quality spaces which in turn generated lower rental rates.   

The table below provides a summary of the performance of retail spaces in MUDs against market performance in 2021;   

Cytonn  Research 2021  

• Commercial Office Space   

The average rental yield for commercial office spaces in MUDs came in at 7.1%, 0.5% points higher than the market performance which realized an average rental yield of 6.6% in 2021. The performance by MUDs was largely attributed to; i) the presence of quality spaces generating higher rental rates at Kshs 105 per SQFT compared to the market’s average of Kshs 91 per SQFT, and, ii) higher prices at Kshs 12,924 per SQFT against market’s average of Kshs 12,306 per SQFT generating higher returns. In light of this, Karen was the best performing node with an average rental yield of 9.0% against the market average of 7.1% due to; i) the presence of high-end developments such as the Galleria business park and the Hub that offer higher rental rates and returns, ii) adequate infrastructure and amenities servicing the area, and, iii) prime location targeting clients who are willing to pay premiums for the spaces. Eastlands was the worst performing node with an average rental yield of 5.0% as a result of the availability of low quality office spaces generating lower rents at Kshs 80 per SQFT against the market average of Kshs 105 per SQFT.  

The table below shows the performance of office spaces in MUDs against the single use themed market in 2021;     

All Values in  Kshs  Unless Stated Otherwise  

• Residential Space   

Residential units within MUDs recorded an average rental yield of 6.0% in 2021, 0.8% points higher than the single-use residential market rental yield of 5.2%. The better performance was largely driven by; i) availability of adequate amenities and infrastructure, and ii) relatively higher prices and rents at Kshs 142,055 per SQFT and Kshs 763 per SQFT, respectively, compared to the Kshs 88,013 and Kshs 459 per SQFT realized for the single use residential theme, respectively. Westlands was the best performing node with an average rental yield of 7.0% due to the presence of affluent developments fetching high rents and prices, and the adequate infrastructure servicing the area such as Redhill and Mwanzi roads. However, Eastlands was the worst performing node with an average rental yield of 4.2% resulting from; i) lower rental prices and rates, ii) inadequate infrastructure to service the developments, and iii) availability of low quality units fetching lower rates that affect returns as well.    

The table below summarizes the performance of residential spaces in MUDs against the single themed market in 2021;   

All Values in Kshs Unless Stated Otherwise  

Cytonn  Research 2021   

Section III:  Mixed-Use Developments Investment Opportunity and Outlook   

The table below summarizes our outlook on Mixed-Use Developments (MUDs), where we look at the general performance of the key sectors that compose MUDs  i.e.  retail, commercial office and residential and investment opportunities that lies in the themes;  

Disclaimer: The views expressed in this publication are those of the writers where particulars are not warranted. This publication, which is in compliance with Section 2 of the Capital Markets Authority Act Cap 485A, is meant for general information only and is not a warranty, representation, advice or solicitation of any nature. Readers are advised in all circumstances to seek the advice of a registered investment advisor.

Subscribe to our Weekly Updates

• P.O Box 20695 - 00200, Nairobi, Kenya
• Cell +254(0) 709 101 000
• Tel +254(0) 20 3929 000
• WhatsApp +254(0) 748 070 000
• United States
• +1 (240) 368-6217
• DOWNLOAD OUR APP

• Cysuites work spaces, Church Rd, Westlands, Nairobi, Kenya
• Suite 1150, 1775 Eye Street NW, USA, Washington DC 20006, USA
• Investments
• Private Equity
• RiverRun Estates
• Cytonn Towers
• Taraji Heights

Navigating Mixed Used Development in Kenya, Its Uptake and Potentials

Editor's Review

Some of the leading mixed development projects in the country include; Garden City Mall, Two Rivers among others.

Kenya’s leading property company BuyRentKenya on Thursday hosted a webinar on mixed developments in the country and how they are shaping the property landscape locally.

Mixed development can be simply broken down as an establishment that has diverse investments and properties. For instance, instead of putting up a mall full of stalls, you can break it down and have stalls, residential spaces, and offices among other incoming generating projects.

The webinar brought together top industry leaders that include; President of Women in Real Estate Robyn T. Emerson who moderated the session, Esther Karegi (Laser Properties), Wilson Mugambi (Architectural Association of Kenya President), and Jayesh Chavda (TRV Developers) who were the panelists.

During the session, all the panelists agreed that mixed development is the way to go as it helps balance the risk and guarantees high returns. This is so because you’ll have diverse developments in your property, meaning if one section is struggling, then the revenue from the other sections can supplement it.

While breaking down the concept of mixed-use development, the panelists noted that it is not limited to a mall setting, as it can also be used in gated communities and estates where a group of people come together, set up their homes, and start developing other infrastructure like schools, common ground, shops among others.

The panelists also made it clear that a mixed development does not necessarily need to be a multi-million project. According to them, any established that hosts several service-providing entities qualifies to be a mixed development. For Instance, a building with an M-Pesa shop, butchery, chemist among other amenities is a mixed-use development.

Unlike past Mixed Development projects like Buruburu estate, madaraka estate etc, current developers have notably switched to apartment blocks due to the high land prices thereby having several blocks of highrise buildings for the residents and a separate block within the premise that hosts hospitals, fitness clubs, and shops. Most of these new developments also have dedicated spaces for schools and playing grounds.

A few notable concerns from some of the webinar participants like Nishit shah is the lack of consideration for the elderly, sick, or the disabled since most apartment blocks do not have a wheelchair ramp or lifts.

Another contribution to the webinar was made by Elizabeth Wachira on the possibility of having Memorial Parks in the larger Mixed-Use Developments. This is from the growing popularity of cremation as opposed to burials with more and more people sitting with urns in their houses, waiting for the appropriate time to dispose of their loved one's ashes. With Memorial Parks, there could be a beautiful garden where people can go and pray/be with their departed loved ones.

As to whether mixed development is a reserve of the elite and the middle class, the panel held the view that mixed development is for everyone, what is important is thinking outside the box and working within your budget.

Related Topics

• ##WinningDuringaPandemic
• ##MixedDevelopments
• ##TheFutureOfRealEstate

Previous Post

Showmax to Stream all Matches of UEFA Euro 2020

Tension as heavily armed robbers attack village, beat women and children, leave a comment, related stories.

President Ruto Awards Charter To 2 Universities

Weatherman Issues Heavy Downpour Alert In 5 Regions

MPs Approve Motion To Kick Out CS Linturi

MCK Report Reveals Most Watched TV Stations In Kenya

Nairobi Leo Among the Most Visited Websites in Kenya - MCK Report

President Ruto Appoints New Chief Of Defence Forces

Connect with Us

Latest stories.

Clamour for Mixed-Use Developments in Kenya Explained

Kenya’s real estate sector continues to evolve with each passing day. Kenyan homebuyers and those seeking to rent are increasingly seeking and adapting to the changing trends of homeownership that brings almost everything under one roof.

On Thursday, BuyRentKenya.com Kenya’s leading property marketplace and Building in Kenya, held a webinar that brought together experts in the real estate and building industry to unpack what lies within and without the mixed-use developments.

Across the country, whether in urban centres or newly thriving suburban areas, new construction or adaptive reuse, mixed-use development is steadily gaining ground as better and optional choices trend among residential homebuyers.

This new drift, according to experts, is still in the preliminary stages and is set to redefine the future of homeownership in Kenya.

Mixed-use properties combine commercial, residential, and even industrial spaces into one property. It is a combination of residential and non-residential buildings planned and developed within a city, municipality, and/or state.

For investors, this means the combined benefits of both property types in one space and for home buyers, it means a combined residential space that gives a feel of a mini-empire sort of, with virtually everything within the same locality.

According to Mr. Jayesh Chavda, the Director of TRV Developers, mixed-use development has been with us for the longest time and runs from rural to urban areas. He says when it comes to mixed-use, people should not just think of a gated community but within the estates, they live in as well.

“Any building that runs a business, such as a shop on the ground and residential units on top or at the back is mixed-use,” he said. Jayesh says that mixed-use development in real estate in Kenya is the new way of making life easier for Kenyan homebuyers to maximize space, conserve energy, and support the growth of businesses within an estate.

As the world continues to take shape in the new norm, people are increasingly working from home or looking for workspaces that are within their locality. Most of the mixed-use developments coming up, for instance, have been able to integrate office spaces within the same community. They seem to have clicked residential, mall, and office space, marrying them within the same environment.

Global Companies to Reinvent the Office Space Beyond the Pandemic

Wilson Mugambi who is the President of the Architectural Association of Kenya (AAK) says even as people rush to embrace mixed-use development, there is need for proper planning to ensure that the much-needed social amenities are not overlooked.

At the same time, Esther Karegi from Laser Properties believes that affordability and quality should always be at the center of mixed-use saying that it is the only way to ensure that many people get to own homes.

Ranging from a single building to an entire neighborhood and built to be responsive to a specific environment, mixed-use residential projects aim to offer various benefits: improvements in home affordability, walkability between housing, workplaces, and other amenities, and stronger neighborhoods.

Common features that define such developments include and are not limited to spacious outdoor spaces such as plazas and corridors between buildings and sidewalks. Most of the mixed-use development projects have a well-enhanced infrastructure in terms of feeder roads within the locality.

They also come loaded with goods both for investors, tenants, and homebuyers. For instance, these properties are often close to other community amenities, making them highly desirable residential spaces.

This means that for an investor, one will always have people streaming their way in search of space lessening the overall risk often faced in the sector. This is so because the risk is spread in various “investments” within the same area with different revenue sources. On the other hand, tenants and homebuyers get to enjoy a plethora of services that are within reach.

BuyRentKenya.com’s CEO Elizabeth Costabir shared that the webinar is part of a series dubbed “winning during a pandemic” that seeks to provide thought leadership in the real estate sector.

Their next two webinars in line will address how investors can repurpose unoccupied spaces in malls or offices and how building green can contribute to solving the housing crisis in the future.

Khusoko provides market insights into Africa's business investment as well as global trends that impact East African businesses.

Related Posts

Kenyans go online: 10 million to shop groceries by 2027, nairobi land prices: where to invest in q1 2024 hass consult, carrefour expands in nairobi: 24-hour gtc mall store in westlands.

Pingback: Factors to Consider When Investing in Real Estate

Save my name, email, and website in this browser for the next time I comment.

Type above and press Enter to search. Press Esc to cancel.

• Eastern Africa
• Login / Register

• South Sudan
• South Africa
• Sierra Leone

Examples of Mixed-Use Developments in Nairobi

There are some development projects that harbor office spaces, hospitality spaces, shopping malls, residential spaces among other uses within the same environment..

 In Nairobi, for example, it is a common feature in properties. The basement of most buildings are shop and office spaces and on the other floors are residential rooms. However, there are some conspicuous property examples with retail, residential and office spaces;

Two Rivers Mall

The Two Rivers Mall is located along Limuru Road in Nairobi and sits on a 100-acre piece of land. The property is owned by Centum Group. It was constructed in two phases where the first phase consists of offices (21,000M²), and a retail segment (65,000M²) that holds the largest mall in East Africa. On the other hand, the second phase will consist of the residential segment (471 units)whose completion is expected in the second quarter of 2022.

Global Trade Center

The Global Trade Center is located at the Waiyaki Way- Chiromo Lane intersection in Westlands, Nairobi. The property sits on a 7.5 acres piece of land.

This property comprises 6 towers: 4 residential towers of between 24 and 28 floors (possibly 514 units), a 47floor office tower (67,200M²) and a 35-floor hotel tower (11,592M²)

Riverside Square

Riverside Square has its location along the riverside drive, Nairobi, opposite the Chile Embassy. The property sits on a 3-acre piece of land. The property offers a residential segment (198 units), office segment (10,684 M²) and retail segment (1,672M²).

The property is divided into four wings namely: the upper west wing, lower west wing, upper east and the lower east. The upper west side holds retail and offices. The lower west houses the 1- bedroom and 2-bedroom apartments. The upper east side accommodates 1,2-bedroom apartments as well as the 3-bedroom duplexes while the lower east holds the 3-bedroom apartments.

Le’mac Towers

The property is located off Waiyaki way in Westlands area of Nairobi. It sits on a 1.32acres piece of land. It is owned by Marks properties.

 It is the tallest residential building in Kenya today as it is 126 meters high in the sky. The 24 storey building offers office spaces from the 1st to the 6th floor, 7th floor as the service level and 1-, 2- and3- bedroom apartments from the 8th to the 22nd floor. At the top of the tower, is a double-storey sky club that holds a spa, a gym, restaurant, lounges, steam and sauna rooms as well as a swimming pool.

-Edited by Emomeri Maryanne

• #lemactowers
• #lemachotel
• #riversidesquare
• #mixedusedevelopment
• #realestateinvestment

Previous Article

How to Obtain Licenses in The Investment Sector

Next Article

Kenya's Bus Rapid Transport (BRT) Services to be Rolled Out in June 2022

What's your reaction.

Dominic Mwangi

Related Posts

Kalonzo Musyoka and Yatta Land

Mutua William Aug 3, 2021 0 1401

The Global Trade Centre: East Africa's Tallest Work of...

Bella Boson Jan 29, 2022 0 1449

What is Conveyance of Title?

Dominic Mwangi Mar 7, 2021 0 953

Role of Technology in Transforming Landscaping in Real...

REBP Apr 15, 2024 0 315

Types of Windows Based on How They Open

Dominic Mwangi Mar 1, 2021 0 1133

Non-Performing Loans in Kenya on the Rise

Babra Adhiambo May 22, 2021 0 734

• Facebook Comments

Popular Posts

Real Estate Investment Strategies for Beginners in Kenya                        

winniemaina Mar 2, 2024 0 159

Billboard Investing in East Africa and Their Influence...

AREBP Jun 27, 2023 0 121

The Role of Real Estate in Community Development

Elizabeth Wangechi Apr 26, 2024 0 86

Top 9 Nigerian Celebrities With the Most Expensive Houses

Samuel Agbelusi Jun 29, 2021 1 57

CJ’s Restaurant: Ugandan Tycoon behind the Famous Restaurant...

Babra Adhiambo Feb 3, 2023 0 45

Recommended Posts

How Real Estate Agents Help Clients Find Their Dream Home

Samwel Bwire Apr 29, 2024 0 162

Role of Real Estate Agents in Negotiating Deals and Contracts

[email protected] Apr 26, 2024 0 162

Elizabeth Wangechi Apr 26, 2024 0 774

Legal Responsibilities of Real Estate Agents in Property...

Seliphar Musungu Machoni Apr 26, 2024 0 189

Future Outlook: Predictions and Projections for Real Estate...

Joan Achieng Apr 22, 2024 0 387

Random Posts

Application of land for investment in tanzania..

Martha Fatael May 6, 2021 0 10004

As far as investment for foreigners is concerned, there are about seven steps provided...

Travel Diaries: Places to Visit in Zambia

REBP Jul 14, 2023 0 4293

Zambia is a wonderful country with a range of attractions that are sure to delight...

Technology is playing a pivotal role in transforming landscaping in real estate...

Top 10 Tourist Destination Places in Egypt

Victor Kiplagat May 17, 2022 0 10242

Egypt’s rich history and fascinating Egyptian ruins make it a top destination, in...

5 Ideas to Help You Pick Your Bedroom’s Curtain

REBP Jan 30, 2023 0 10665

Most traditional bedroom designs often take the curtains and make them the focal...

Real estate companies contribute greatly to the growth and development of communities....

Mixed-Use Developments: The Future of Real Estate?

Are you a property investor looking to venture into mixed-use developments? Listen to this webinar session on whether they are the future of real estate.

On the 20th of May 2021, BuyRentKenya in collaboration with Building in Kenya held their first webinar of a three-part series to discuss mixed-use developments and if they are the future of real estate.

The webinar speakers were Esther Karegi, Agency Manager from Laser Properties, Jayesh Chavda, Director of TRV Group of Companies, Wilson Mugambi, President of the Architectural Association of Kenya and the moderator Robyn Emerson, President of the Women in Real Estate(WIRE) and Author of Building in Kenya.

Table of Contents

What is a Mixed-use Development?

It refers to a development that integrates residential and commercial use in the same space.

Investors are maximizing how they use their piece of land by creating spaces where people can live, play, work, get entertainment and meet their lifestyle needs under one neighbourhood.

Some of the mixed-use developments in Nairobi include Two Rivers, Garden City, Ciata, Tatu City all of which offer different facilities such as medical centres, retail shops, eateries, banks and many more.

Are They the Future of Real Estate?

It is not only about the returns but also how sustainable they are. There are many benefits of mixed-use developments.

• They’re more profitable and provide various streams of income
• The variety of tenants can lessen the amount of risk to the investor
• People having easy access to services leads to property demand
• Gives the developer more flexibility to adapt to people’s changes
• Provide spaces where people can live, work, play in one location
• Better to manage which leads to higher quality tenants and fewer vacancy cycles
• Builds a community if the development is in a shared space

Conversely, mixed-use developments have their drawbacks.

• They require longer planning periods and permits
• Some locations are not suited for a mixed-use development
• Getting financing might take time especially if you are setting up in a new location
• They don’t provide privacy to the residents
• There’s a lot of noise and congestion from all the activities

Another challenge that came out in the webinar is the infrastructure and servicing. It is not only a division of land but also a planning and zoning endeavour.

One participant brought out a valid point about most developments not being able to cater to the elderly or the sick because they don’t provide lifts or wheelchair ramps.

Vertical Vs. Horizontal Mixed-Use Developments

Because of the lack of space in Nairobi, developers are being challenged to find ways in which they can build mixed-use developments vertically as opposed to horizontally.

Vertical developments provide different users in one building. For instance, the floor below can consist of shops, restaurants and other commercial businesses while the upper floors can be used as residential spaces.

On the other hand, horizontal development means having single-use buildings in one mixed-use parcel. This way, there can be residential units and businesses in the same location within a walking distance.

How to Invest in a Mixed-Use Development

You can construct a mixed-use development by finding the right location and financing for your project. Take some time to learn about the area and the demographics. Study the market and understand the end-user. Larger projects tend to be less flexible.

Flexibility and affordability are key when investing in mixed developments. Developers should take note of the costing of all processes and ensuring effective budget and cost management.

Mixed-use developments are only efficient if the services paired have an adequate supply and demand relationship. An oversupply of offices, houses or shops in one area is not effective development.

Mixed-Developments are the Way to Go

A building or space that provides multiple uses adapts to the ever-growing needs of its tenants which will provide convenience and improve their quality of life. Happy tenants mean more return on investments for investors – a win-win situation.

Watch the FULL webinar and stay tuned for our next session of the #WinningInAPandemic series.

BuyRentKenya

• Sell Property
• Real Estate Projects
• Real Estate Agents
• Jobs Vacancies
• Classified Ads

+254 20 2307051 | +254 717 665 213

6th Floor, Wing C - West End Towers,

Waiyaki Way, Westlands, Nairobi

• © 2024 BuyRentKenya
• Privacy Policy

Property & Construction Solutions

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. However, while there is a huge opportunity in developing mixed-use facilities in specific African regions, these projects are not without challenges and need to be correctly approached to maximise benefits, according to 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 mixed-use developments. There is an increased need for effective use of space in both city centres, and property developers are responding,” says White. “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.”

Profica specialises in project management on projects throughout Africa and is also involved in the early-stage conceptualization and pre-development planning on these types of projects. White’s team has gained learnings from multiple projects across Africa, including the award-winning project management of Mutual Place in the heart of Sandton, a large super basement integrating five multipurpose buildings.

From a developers perspective, White says that for mixed-use 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. “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,” 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.

As Profica works on more mixed-use projects, different approaches to the fundamentals of space sharing and optimisation are emerging. “Parking, for example, provides real opportunities to save space when managed carefully. We’re seeing shared countercyclical parking provided for office use during the day, residential at night. Creative ways to manage challenges such as waste, smells, traffic, and noise transferring from one use of the building, such as a busy restaurant or shop, to residential areas are also being found.”

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.”

It’s also not just about the mix of uses, but within each use, there are specific variances that need to be considered. For example, residential units for rental in city centres are designed with rental affordability in mind, essentially a different product from owner-occupied units which are longer-term. “These nuances all affect how the mixed-use developments integrate and provide amenities for the different residents and visitors,” says White.

“Overall, mixed-use developments are very positive and, if carefully managed from the outset, provide major returns on investment,” concludes White. “Enabling people to live, work and play in a well-designed precinct fundamentally transforms lifestyles and we expect the trend to continue across Africa.”

White says the success of a mixed-use development depends on the following factors:

Financing – Because a mixed-use development generally requires phased-in development periods, it may be difficult to finance compared to a single-use project of a similar size due to the various asset classes included in 1 development. The type of tenants and the strength or covenant of these tenants will have an effect on the funding parameters.

Market demand – For a project to be a success, it must attract a significant level of market demand in its own right. Market analysis to assess the supply and demand for proposed multiple uses is critical. Typically different sectors have varying rental strengths and vacancies from each other and are at different points in the property cycle at any given time.

Effective design and project management – Developing a master plan for a mixed-use development is critical to the financial success of a project. It must allow for phasing and not encumber the first phase with too much enablement and infrastructure cost.

Public and political support – Community members and key stakeholders need to be engaged early in the project. Development plans need to highlight infrastructure and transportation use, the economic benefits of the project to the community, regulatory challenges, conformance to zoning codes and availability of developer incentives. Don’t underestimate the impact the neighbours and local residents can have on the delivery of such projects.

Site location, size and topography – Site access, connectivity to other land uses, access to multiple modes of transportation, and vehicle and pedestrian circulation systems are some of the critical factors for project success.

Similar Posts

Profica celebrates a decade of success in Nigeria

After initially working on projects for a major oil company in 2007, pan-African property and construction solutions company Profica put down firm roots in Nigerian soil in 2011, firstly with a dedicated team in Lagos, and then by deploying staff on the ground in Port Harcourt, Abuja and other cities in response to project requirements….

Meet Profica’s team in Morocco

Younes Lachiri and Sabrine Boudih are at the helm of the new Profica office in Morocco. Both experienced CBRE team members, they have transitioned seamlessly to establish Profica’s local presence in the country. CBRE Excellerate, active in Morocco since 2005, acquired a share in Profica. Profica is CBRE’s project and delivery arm across Africa, with…

Profica acheives a level 3 B-BBEE status under the new scorecard

Profica is very proud to announce that we are now accredited as a Level 3 B-BBEE contributor, rated by BEE Verification Agency.

Stanbic IBTC – we’re in the ground!

Work is going well with the flagship new headquarters for Stanbic IBTC Pension Managers Limited in Nigeria as we project manage the development and build of a state of the art home in Victoria Island, Lagos for this dynamic financial brand. Piling was completed ahead of schedule and we’re making good progress on the foundations and…

Profica provides expert design and build solution for ABSA bank’s innovative retail offering

Leading construction and property solution company Profica has recently completed a tenant installation and full fit-out for ABSA bank’s Umlazi Megacity branch in Durban. This is just one of around 40 separate design & build projects that Profica is undertaking as part of ABSA Bank’s innovative Client Facing Network Programme, which will ultimately supply over…

Profica delivering for Zimmer Biomet at Waterfall City

Profica has been appointed by first-time client, leading global medical device manufacturer Zimmer Biomet, to provide tenant representation and office fitout for the company’s new warehouse and office building currently under development at the Waterfall Distribution Campus in Midrand. As representing Zimmer Biomet throughout the build from ground breaking through to tenant installation, Profica is…

• Reference Manager
• Simple TEXT file

People also looked at

Original research article, differences in experiences with the development of mixed-use projects from 2004 and 2017.

• Indiana State University, Construction Management, Terre Haute, IN, United States

Mixed-use developments, having three or more uses within one development, have several benefits for communities, however due to the complexity of these developments, several challenges arise in the planning and development phases. The main challenges are local regulations, neighborhood opposition, financing, and insufficient market interest. A 2004 survey of these challenges was repeated in 2017 and the differences between the two are compared in this paper. Significant differences were found in the frequencies of the challenges, mainly that the proportion has dropped in 2017. However, local regulations remained the most significant challenge encountered. The decrease in frequencies is conceivably a sign that regulators, financers, and members of the community are becoming more familiar with mixed-use developments.

Introduction

Mixed-use development, multiple uses within a project, although not a new concept, is continuing to grow in popularity. Mixed-use development has several benefits for communities and is a key strategy in achieving sustainable environments ( Woo and Cho, 2018 ). It has been utilized as a popular method for community revitalization, helping to increase density which helps grow communities with limited land space or empty city centers and create a vibrant space for people to enjoy. Additionally, the developments provide benefits to the environment, retailers, residents, and municipalities. Increasing the walkability of an area can reduce commuting distance and auto mode share ( Lee, 2020 ) and thus reduces pollution. Offices and retailers within a mixed-use development become immersed in potential customers from the diverse residents and other businesses ( Chinburg Properies, n.d ; Slowly, 2016 ). Because amenities are closer to home, mixed-use developments promote walking, which provides health benefits for residents (University of Delaware De). Further, it is estimated that nearly 33% of people would prefer to live in a diverse, walkable community ( Slowly, 2016 ). Municipalities see a tax revenue in-crease from mixed-use versus single use and are able to save on infrastructure construction, such as roads and water supply, because of the shared land use (University of Delaware De; Newcomb, 2015 ; Lamb, 2012 ; Useful Community Developm, 2017 ). Any one of these assets would be a reason to promote mixed-use development, to say nothing of simply overcoming obstacles to its provision. In combination, they form a compelling case for mixed use as an element of a more inclusive and prosperous society.

Levine and Inman used the Urban Land Institute definition of mixed-use developments as having three or more uses in one project ( Urban Land Institute, 2011 ; Levine and Inam, 2004 ) as this very premise makes mixed-use developments popular, it also creates challenges. Zoning, building codes, and appropriate uses are some of the prominent challenges developers face when planning this type of project. Transferring one development’s successful practices to another development rarely result in the same outcomes. For this reason, it has proven difficult to determine best practices for these types of projects.

In 2004, Levine and Inam (2004) from the University of Michigan performed a nation-wide survey of developers to determine the highest impact challenges to mixed-use developments. The present study has recreated the survey to determine if there are significant changes in challenges to the use of mixed-use developments in 2017. Further, the current survey also collected the opinions of planners, architects and construction managers as they are the stakeholders most involved with the upfront planning processes involved for mixed-use development and represent their own aspects, opinions, and goals for the success of the project. This study aims to answer the following questions:

• What are the current factors affecting mixed-use development as perceived by developers, planners, architects, and construction managers?

• What are the differences in the factors of local regulation, market interest, financing, local opposition, in a survey of developers in 2004 ( Levine and Inam, 2004 ) and 2017?

Methods and Materials

Literature review.

Mixed use development has become a popular tool to revitalize communities, increase sustainability, and develop a stronger sense of community. The exact definition of mixed-use development is relative from country to country ( Lau et al., 2005 ). In the United States, the Urban Land Institute ( Urban Land Institute, 2011 ) defines mixed-use as “three or more significant revenue-producing uses (that have a) functional and physical integration of project components” (p. 2). Additionally Lau et al. (2005) suggest that no single-use should utilize more than two-thirds of the usable floor plan of the project. The potential uses for the project include “real estate with retail, office, residential, hotel, recreation, or other functions that are pedestrian-oriented” ( Rabianski et al., 2009 ) (p. 206). These uses encompass the popular live-work-play environment for people where everything needed is comparatively close. However, despite these definitions, one mixed-use development approach and plan rarely results in the same success amongst various projects; this is due to the various ways in which mixing uses may be applied.

According to Grant (2002) , there are three main ways that a community may apply mixed-use: increasing the intensity of land uses, increasing the diversity of uses, and integrating segregated uses. Intensity of land use is known as the variety of choices of a specific type of use; multiple types of retail or housing choices to accommodate all levels of income ( Niemira, 2007 ). Projects may be as large as entire neighborhoods, an entire street or block, or as small as an individual building; located in inner city or city centers, brownfield or greenfield sites, or city edges such as suburbs ( Rowley, 1996 ). These projects are typically implemented as an attempt to promote mixed use developments through “1) conservation of established mixed-use settings; 2) gradual revitalize and incremental restructure of existing parts of towns, such as infill development and reuse, conversion and refurbishment; and 3) comprehensive development or redevelopment of larger areas and sites” ( Rowley, 1996 ) (p. 87). Table 1 summarizes the variables of these factors.

TABLE 1 . Factors and variables for the application of mixed-use development.

These various factors and their options of mixed-use give more credence to the idea that the same urban form may not be successful in another development; yet can be adaptable as needed, provided the proper planning is performed. This also shows that mixed-use development can occur on several different scales and can intertwine together in various environments; thus, a critical analysis should be performed to determine the best approach to incorporate the proper setting, location, and timing.

As mixed-use developments have evolved, so has their popularity. Rowley (1996 ) points out that due to the diversity of the urban setting, experiences are different than in suburban or rural settings, such as “people, activities, uses, architecture; the amenities, open spaces and other visual stimuli that cities can offer; and a rich public life” (p. 89). Further, many of these services, including retail and public transit, rely on a higher density in or-der to function ( Brewer and Grant, 2015 ). In a survey from four real-estate associations, the top three reasons cited for the popularity in 2006 were: “the live-work-play environment as a single location is convenient; rising land prices are making more density necessary; and the format is being encouraged by local public agencies” ( Niemira, 2007 ) (p. 54). While there are individual benefits to mixed-use development, there are community-wide benefits as well. Hoppenbrouwer and Louw (2005) report that the most significant advantages of mixed-use development are a reduction in travel needs, followed by increased urban diversity, and vitality.

Mixed-use developments generate economic vitality ( MahmoudiFarahani et al., 2018 ) benefits for businesses. Job creation is a strong sign of vitality and a main goal of mixed-use development is mixing residences and offices to provide easy access to employment and clients ( Grant, 2002 ; Hoppenbrouwer and Louw, 2005 ; Grant and Perrott, 2011 ; Kong et al., 2015 ). Businesses actually prefer to be in mixed-use as some of their client-base is already created just by proximity ( Chinburg Properies, n.d ; Slowly, 2016 ); for example when stadiums or arenas are in the community, there are “50,000 people will want to have something to do before and after the game other than hangout in the parking lot” ( Slowly, 2016 ) (para 9). Even on a smaller scale, a community with a theater or playhouse has the same need, employees have a place for lunch, entertainment, and so on ( Efficient Gov, 2015 ). Diverse uses attract more and diverse people, providing an increased potential for the business to be seen rather than with an isolated location ( Chinburg Properies, n.d ; Slowly, 2016 ; University of Delaware De). Further, property managers tend to provide better service as they have more clients within a building, resulting in quicker response to issues, preventative maintenance, and lower costs from sharing the building with other inhabitants ( Chinburg Properies, n.d ; Buildings, 2009 ). If successful, profits for businesses in mixed-use communities can exceed traditional locations by three times, sometimes more ( Leonard and Cumbelich, 2014 ).

Regulations are required for infrastructure maintenance and economic support. Roads, water supply, drainage, etc. are built to a specific capacity and if these capacities are exceeded they can break down faster, require more maintenance, or may not work at all; thus planners are often unable to accommodate all development requests of higher density. Additionally, uses are regulated by zoning in order to not saturate the market, preserve history, or not disturb residents. One jurisdiction may have different objectives and purposes or different views how to reach them in another district. Besides counties, jurisdictions could also be cities. Each jurisdiction has a committee of people from the community that approves regulations, zoning changes, land use, and construction. These planning committees are led by planners who are professionals that are employed by the city or county in order guide the committee that make decisions on these regulations ( City planning, 2016 ).

Planning staffs and commissions do not always support the mixed-use concept. In interviews performed by Grant (2002) , the researcher found that planners of smaller communities hesitate to utilize mixed-use as they doubt the benefits. Instead, they believe that existing neighborhoods need support and that people choose the suburbs for, among other benefits, the separation from other uses. Rowley (1996) suggests that some planners make uninformed assumptions about the community’s wants and needs. Further, they underestimate the implications of these assumptions. On the other hand, Brewer and Grant (2015) suggest some planners promote density as a way to increase services within the community; however, their execution is lacking. The thought is that increased density leads to lower housing costs and better support of mixed-use; however, actual the actual populations do not meet expectations. Therefore, services do not have the expected support, resulting in the loss of the anticipated benefits associated with mixed-use development.

Another hurdle in successful mixed-use is identifying proper compatibility of uses. This includes compatibility for community and other uses in the area; Rabianski et al. 2009 describes this as creating a synergy in the community. For proper integration and increased vitality, a market analysis for each use is needed to ensure relevant uses, scale, and location ( Anders, 2004 ; Rabianski et al., 2009 ). Taleai et al. (2007) found that uses and land types can actually “repel” other uses. For example, although highways provide accessibility, they also create noise which can be problematic for residences ( Taleai et al., 2007 ). Similarly, other competing or over-saturated businesses and uses should be avoided, instead uses should be complementary. Rowley (1996) describes other factors that affect people using mixed-use developments such as having accommodations for the disabled and elderly, various levels of income, and convenience of use. In order to maximize infrastructure savings, space should be designed to be used as often as possible, including outside of normal business hours ( Rabianski et al., 2009 ). In a diverse area, individual schedules can vary greatly resulting in varying times of usage needs. Rowley (1996) suggests sharing spaces, especially for uses that may not otherwise be able to afford the space on their own; for example a building room may host an aerobics class in the morning, a book club in the afternoon, and a card club in the evening. This type of space sharing helps to further maximize available uses and amenities for the community.

Although many people prefer mixed-use city life, there are as many others who do not wish to live in the city. And, while people enjoy the conveniences that mixed-use development offer, some are very cautious about what uses should be mixed. For example, uses such as “group homes, day care centers, waste management facilities, high-density housing, halfway houses, or prisons typically encounter resistance from residents. Even parks and playgrounds sometimes met opposition” ( Grant, 2002 ) (p.73). Brewer and Grant (2015) point out that attempts to increase population densities and mix are affected by household dynamics. For instance, families prefer homes with gardens, that allow privacy for peace and quiet, offer some separation, and provide community-focused amenities ( Rowley, 1996 ). For a long time, the American dream included a home in the suburbs with a white picket fence and living among people who are nearly the exact same, which goes against urban mixed-used development. However, even in 1996, Rowley notes that social networks are only partly shaped by the home locality, mostly dependent on personal mobility, “convenience, choice, and price” are the main factors of determining shopping. Technology since then, such as the internet, hand-held devices, and social media, has developed strong social networks that are not even in the same state. At the same time, mobile applications such as Uber rideshares have made it easier to live without a car, making urban living even more accessible. These cultural variables can differ in intensity from area to area, making research even more indispensable for planning. Determining the best use of space to attract the most people is integral to mixed-use development.

In addition to the comprehensive pre-construction planning process and challenges, there are challenges during design phases as well. All construction must comply with local building codes, however with mixed-use development, each use may be subject to a different code which can slow production and add cost. Additionally, each use requires its own support system; for example, it is necessary for a restaurant to have an isolated exhaust system from the rest of the building, and retailers do not want apartment plumbing pipes visible in their space ( Koch, 2004 ). For each use, building codes require different fire suppression methods, and in a mixed-use these can become even more stringent ( Rowley, 1996 ) due to the mixture and higher density. Furthermore, structural safety can become challenging as well. Retail space is more open and expansive than residential or office spaces. Typically retail is on the ground floor for easy access to shoppers, thus the ceiling of this space must be designed to support the above load. As retailers prefer to have minimal columns in or-der to maximize space and have unobstructed views, a support beam must be utilized. This is very expensive as is requires engineered support beams and more material for construction ( Koch, 2004 ).

Although mixed-use development can help to diffuse economic risk across the variation of uses, there are several economic risks which can detract developers from attempting innovative mixed-use projects ( Grant, 2002 ). As Grant and Perrott (2011 ) point out, construction costs for these projects are higher than single-use construction, however they do not always generate a sales premium ( Rowley, 1996 ; Koch, 2004 ; Niemira, 2007 ). Unfortunately, people outside of the construction process do not always understand what adds costs to projects and therefore do not prefer the premium sales price. During an interview, a principal from Elkus/Manfredi Architects, LTD. stated that mixed-use projects can cost as much as 70% more than in an average suburb ( Koch, 2004 ) where most uses are separated by building. Furthermore, a survey by Niemira (2007 ) revealed that almost 2/3 of respondents agreed that mixed-use projects have a longer construction time than that of separate components. The longer a construction project lasts, the more expensive it becomes as day to day overhead expenses accrue and cannot be re-covered. Furthermore, investors see mixed-use projects as less prosperous than single-use ones that consequently have a lower exchange value ( Rowley, 1996 ).

However, there are variables which, when present, further increase the chance of success, specifically economic success. Financial returns have the capability to be higher in more dense neighborhoods as they provide more opportunities to accept a mixed-use project. However, smaller cities can lack these drivers of change created from high levels of population influx. Thus, in these cities, more research should be performed to determine the proper economic, market, and political conditions to accept a mixed-use development ( Brewer and Grant, 2015 ). Niemira (2007 ) survey results, suggests that there are three major factors for financial success: “1) having a major draw–employers, an academic institution, an entertainment facility; 2) developing the project as part of a master-planned site; and 3) having an urban location” (pp. 55–56). Being aware of the unique economic environment in which the project will be constructed will only help to increase the chances of making the development more profitable and attract more investors.

Although there is a consensus on various factors that affect success, previous attempts to utilize explicitly defined best practices have regularly not resulted in the same levels of success from project to project. Further adding to the difficulty of administering best practices, it is difficult to quantify them for a specific area until perceived differences are identified ( Hoppenbrouwer and Louw, 2005 ). Rowley (1996 ) states that mixed-use development “cannot be divorced from cultural priorities and lifestyles” (p. 85). Moore ( Koch, 2004 ) explains that, especially with mixed-use development, implementation depends on culture, context, etc., therefore best practices are not necessarily transferrable. According to Kong et al. (2015 ), this means that “different urban forms generally lead to different urban performance” (p. 95). Each project should be guided by the community’s social make-up and not assumed that it will revitalize the community as it did in another community ( Anders, 2004 ) nor that all residents within the community will benefit from the project ( Grant, 2002 ).

Although significant challenges in planning and completing mixed-use developments exist, there are several instances of successful projects. Taleai et al. (2007 ) state the im-portance of planning, which includes analyzing the current market and defining any potential problems. Extensively engaging the community as early as possible ( Anders, 2004 ) also helps to determine market conditions and overcome problems more efficiently. Market analysis includes identifying both successful and competing uses ( Taleai et al., 2007 ). Many agree that location is important as mixed-use performs better when there is more traffic ( Grant and Perrott, 2011 ) and public transportation is within walking distance ( Niemira, 2007 ). Timing is also important as there needs to be enough people to support retail, yet enough businesses to attract people; thus phasing based on community needs is vital to success ( Grant and Perrott, 2011 ).

In an interview by Koch (2004 ), a president and managing partner of a real estate developer in North Carolina said that to draw people towards the development, he reserves the most visible, ground level portion of buildings for most attractive retailers. Similarly, Niemira (2007 ) survey showed that including a major draw, such as employers, an academic institution, entertainment, etc., is the number one factor in achieving financial success. The second and third results from the same survey were being part of a master plan and being in an urban location, respectively. Niemira (2007 ) also found that “almost 60% of industry players and observers who participated in the survey felt that having public-sector involvement in a mixed-use project would help to make it more financially viable” (p. 55).

Levine and Inam 2004 Results

In Levine and Inam (2004) mailed 2,000 surveys to members of the Urban Land Institute. Of the 2,000 surveys, 706 were returned completed and 693 were qualified providing a 36.5% response rate.

The next four tables summarize the main results obtained by Levine and Inam (2004) , related to the use of mixed-use development in 2004. Table 2 summarizes the challenges encountered by the respondents in 2004 and respondents were able to select more than one challenge and write in a challenge that was not listed. The next table, Table 3 summarizes the designation of “Other” written in. Instead of asking to rank all challenges, the 2004 survey asked two separate questions, the first asking to provide the single most significant challenge, the next question asking to provide the second most significant challenge ( Tables 4, 5 ). Local regulations was the most significant challenge with the highest frequency, followed by neighborhood opposition, “other”, insufficient market interest, and secure financing. Neighborhood opposition was the second most significant challenge with the highest frequency, followed by local regulations, secure financing, in-sufficient market interest, and “other”.

TABLE 2 . Challenges encountered to mixed-use development 2004 ( Levine and Inam, 2004 ).

TABLE 3 . Challenges encountered described as “other” ( Levine and Inam, 2004 ).

TABLE 4 . Frequency of most significant challenge 2004 ( Levine and Inam, 2004 ).

TABLE 5 . Frequency of second most significant challenge 2004 ( Levine and Inam, 2004 ).

This research used a quantitative approach through the use of a survey instrument. The population for this study was United States organizations involved in the preplanning process of mixed-use projects, these include architects, city planners, developers, and construction managers.

The survey instrument developed for this survey is greatly inspired by Levine and Inam (2004) instrument. Demographic questions were added to the current survey:

• Please tell us about the industry function you are involved with.

• A map was added to determine geographic region.

• How many years of experience does your organization have dealing with mixed-use projects?

The main questions that remained the same between the two surveys:

• What, if anything, do you think are significant barriers to the further development of these alternatives?

• Which of the barriers above what is the most significant and second most significant single obstacle to further development of these alternatives.

Questions were then added about the change of the challenge, if its significance had increased, decreased, or remained the same.

The survey questions were included in an online surveying platform (Qualtrics) and distributed to U.S. based organizations. Organizations were asked to send the survey out to their members, including American Institute of Contractors, American Planning Association, Association for the Advancement of Cost Engineering, Next City, United States Green Building Council; the members of the Purdue University School of Construction Management contact list were emailed directly. Additionally, in the invitation email, participants were asked if they could forward the invitation to other stakeholders, there-fore snowball sampling was also used. Additionally, the survey was also publicly posted in LinkedIn via personal profiles.

The research questions to be answered by the survey are:

• What are the current factors affecting mixed-use development as described by developers, planners, architects, and construction managers?

• What are the differences in the factors of local regulation, market interest, financing, local opposition, in a survey of developers in 2004 (Levine and Inam) and 2017?

Responses to the encounters and significance of the challenges were coded either yes or no. If the respondents had encountered the challenge, yes was coded, or no if not. Chi square tests were completed to test the proportional frequencies from the 2004 answers compared to the 2017 answers. However, the ranking of first and second most significant challenge was not tested individually, but as the overall ranking of all challenges.

Descriptive Statistics

Table 6 shows the distribution of the roles of the 107 respondents. Both Construction Managers ( n = 64) and Architects ( n = 34) had a higher response rate than other stakeholders. Unfortunately, the reach to Developers ( n = 6) and Planners ( n = 3) was lower than expected. Because it is unknown which organizations actually distributed the email, it is impossible to know the response rate, however, based on responses, it is assumed low.

TABLE 6 . Frequency of role of respondents.

The initial question regarding challenges to mixed-use development asked for all challenges and barriers encountered, Table 7 summarizes the responses. For this question, respondents could select more than one answer and write in a response not provided. Local regulations is the most frequently selected challenge with 54 selections, followed by financing and neighborhood opposition, each selected 40 times. Insufficient market interest is the least frequently chosen with only 14 selections. The “other” option was selected 18 times with challenges written by respondents, Table 8 provides the designation for these selections.

TABLE 7 . Challenges encountered to mixed-use development.

TABLE 8 . Challenges encountered described as “other”.

When asked to rank the challenges in Table 7 from one to five with one being the most significant and five being the least significant, 64 of the respondents participated. The frequency of the ranking of each challenge can be seen in Table 9 .

TABLE 9 . Current frequencies of challenges rankings.

Analytical Statistics

It is important to note that not only is there potential for change over time, but between the two populations. In 2004, Levine and Inam ( Levine and Inam, 2004 ) were able to reach developers, however in 2017 the same population was not able to be reached and resulted in mostly construction managers and architects.

The survey asked respondents to rank their first and second most frequent challenge; these responses can be seen in ( Tables 10 , 11 ). The survey question asking which challenges were encountered by respondents ( Table 7 ) was compared to the similar question from the survey in 2004 ( Table 12 ) to answer the second research question “What are the differences in the factors of local regulation, market interest, financing, local opposition, and possibly others to a survey of developers in 2004 and 2017?” Table 12 summarizes the data. Local regulations remains the most frequently encountered. However, results indicate that all challenges except financing were significantly different between 2004 and 2017 results. Interestingly, the four (local regulations, neighborhood opposition, insufficient market and other) are perceived as challenges by less respondents in 2017 than in 2004.

TABLE 10 . Current Frequency of most significant Challenge.

TABLE 11 . Frequency of second most significant Challenge.

TABLE 12 . Changes of percent of challenges encountered from 2004 to 2017.

Based on the survey question asking respondents to rank challenges, the first and second most significant challenge rankings were compared to the 2004 survey questions asking for respondents to select the most and second most significant challenge. Table 13 summarizes the responses of the most significant challenge from 2004 to 2017. Local regulations are the most frequently selected as the most significant challenge. Comparing the overall rankings from each year results in a X2 of 11.212 and a p value of 0.024 suggesting that the ranking of 2004 most significant challenge is significantly different than that of 2017. Again, respondents ranked local regulations the most significant, but less by less people in 2017. More people in 2017 perceived financing and insufficient market interest as the most significant challenge.

TABLE 13 . Changes of percent of most significant challenges encountered from 2004 to 2017.

Table 14 summarizes the responses of the second most significant challenge from 2004 to 2017. Again, regulations are still the most frequently selected as the second most significant challenge. Comparing the overall rankings from each year results in a X2 of 2.738 and a p value of 0.603 suggesting that the results from 2004 are not significantly different from 2017.

TABLE 14 . Changes of percent of second most significant challenges encountered from 2004 to 2017.

Although the intent was to compare the same population over time, due to access by the different researchers, the two time period’s populations were different: developers and planners versus construction managers and architects. Depending on the type of project contract, construction managers and architects can become involved in the project at different times. Typically, architects are engaged by developers before construction managers, but not always. Construction managers have been engaged earlier in planning phases resulting in more successful completion of projects ( Moore, 2013 ). These variations in project involvement could potentially affect the challenges that each population encounters. How-ever, it is still important to understand the frequency of these challenges, regardless of population, as they are still experienced around the same type of projects–mixed-use developments.

The initial research question regarding current challenges to mixed-use development asked for all challenges and barriers encountered, which was summarized in Table 7 .

The four provided challenges (insufficient market interest, local regulations, securing financing, and neighborhood opposition) were primarily selected as expected, however the most interesting findings came from respondent’s written submission for the “other” se-lection. While there are several challenges written in, three new challenges were discovered compared to the 2004 survey:

• keep up with demand and growth

• lack of implementation knowledge and development modeling

• these projects are becoming harder for smaller firms

Other challenges were also written in, but are expected from the literature review and 2004 survey; included financial risk is too high, market saturation, complexity of construction and design, no retail involvement, lack of land and land costs, insufficient developer interest, and these projects are not the norm in their NW market.

Local regulations is ranked the most significant and second most significant challenge. In order after regulations, the ranking of the most significant challenge are financing, in-sufficient market interest, neighborhood opposition, and the other category. In order after regulations, the ranking of the second most significant challenges are neighborhood op-position, financing, insufficient market interest, and the other category.

Difference From 2004 and 2017

In analyzing the differences from 2004 to 2017, the percent of the frequencies encountered for each of the years were compared, these are summarized in Table 12 . As mentioned above, there are three new challenges not mentioned in 2004. All of the challenges saw a significant decrease ( p ≤ 0.05) in the proportion of people who encountered these as challenges, except for the financing challenge. This may be for a few reasons: regulators and people in the local community are becoming more familiar with mixed-use developments. Regulators are understanding how to better accommodate these types of construction and are better prepared to handle them. The local community has changed their wants and enjoy the ease and convenience of a live-work-play environment. However, the other explanation for the significant change in encounters is simply the populations that were reached. The 2017 population was compromised of mainly general contractors and architects who may not be as involved in the early planning stages of mixed-use development and therefore may not encounter as many challenges.

When looking at the ranking of the challenges, both in 2004 and 2017 each year the first and second most significant rankings slightly change, Table 13 and 14 shows the differ-ences in percentage of ranking. However, only the most significant ranking saw a significant change with the overall p value under 0.05.

The analysis of the data from this research has provided several interesting results. First, the new challenges identified through the “other” designation provides insight into the current market within the last few years. Not being able to keep up with demand for construction can occur from a few possibilities. Lack of labor force is reasonably the most significant cause, both in manual and office labor. ( Baiden et al., 2006 ). The average labor participation rate in the United States for January through June of 2017 is 62.8%, a 5.4% decrease in the past 10 years, part of an ongoing trend of the past several decades. However, the construction industry perhaps has been hit the hardest; according to several news organizations such as Forbes ( Beyer, 2017 ), Fox Business ( Grant, 2017 ), CNBC ( Olick, 2017 ), Slate ( Gross, 2017 ), and the like have reported on the ongoing shortage of construction labor. This shortage has continued to decline, especially in the last year ( Valenti, 2021 ).

The difficulty of securing financing can also cause issue with supplying demand as does limited land availability. Requesting a development model solidifies one of the main is-sues with mixed-use development in that project planning best practices, unfortunately, do not always work with these projects ( City planning, 2016 ). Constructing an exact replica of a successful project in a different area can result in a drastically different outcome. The community and economic wants and needs must be identified in order to plan for the most successful uses within the development. The last new challenge identified was that it is harder for smaller firms to participate in these types of projects, which can be explained by the other new challenges. A smaller firm cannot always compete with larger firms ( Valenti, 2021 ). High hourly wages and complete benefits can be more arduous for a smaller firm to offer, especially in comparison to larger firms. Further, financing, insurance, and bonds for construction is based on firm experience and size, thus it is more difficult for a smaller firm to actively complete with a larger firm on these projects. While it may be easy for a small firm to complete a single use project, the combination and size of a mixed-use development can make it too difficult for these firms.

Local regulations have remained the most significant challenge, but its frequency has significantly decreased. Neighborhood opposition has also changed since 2004, decreasing in ranking as a challenge. The old fashion idea of the “American Dream” has changed from a suburban house with a white picket fence ( Govindarajan et al., 2016 ). This change could be driven by younger generations who either do not want or cannot afford their own transportation, more sustainable communities, be more mobile (not owning a house), have less maintenance association with a suburban home, and/or wish to support smaller, more local businesses. The appeal of a “live-work-play” community also attracts older generations whose children are now out of the house and may have the same wants that younger people have, as listed above. Also, those whose health may prevent them being able to drive and wish to avoid isolation are also attracted to mixed-use neighborhoods where amenities are more easily accessible. A 2020 survey by the National Association of Realtors ( National Association of Realtors, 2020 ) shows that all age groups, including older generations, show more interest in walkability near their home and less focused on access to highways. However, the survey does show that 60% of people surveyed want a larger yard with more outdoor space and less people around ( National Association of Realtors, 2020 ).

Recommendations

While this research identified new and changes of significance in challenges, there is further data that should be collected. First, more planners and developers need to be reached to survey so that there is sufficient data in order to statistically determine any differences in the view and experience of challenges. Further, interviews should be completed in order to better understand these challenges and what has been done to overcome them, specifically related to local regulations and securing financing as these are the top two most significant challenges.

More data is also needed to discover why demand cannot be met, if this is actually an emerging challenge that is widespread, and if this is an issue specifically related to mixed-use developments or all construction projects in general. The cause of this challenge, whether it is being able to secure financing, having proposals rejected, lack of labor force, or something completely different, will drastically affect the way in which it is over-come.

Local regulations have been an ongoing issue for mixed-use development. Two main actions should occur to help combat this issue: policy change and education. All roles should be provided more resources in order to better understand mixed-use development, their benefits, and how they can help streamline the implementation process, particularly where mixed-use is a new concept to a community. Educating each role of all perspectives and challenges is important for any interdisciplinary team, especially in this these types of projects. When all parties can understand each other better, issues can be more easily and quickly solved. With education, policy change should be encouraged as well. As presented in the literature review, other countrie’s zoning are much more mixed-use friendly, have less strict definitions of zoning/classes to allow for mixed-use without amendments or need for rezoning approval and there are often public/private partner-ships to aid in starting and completing a project. This type of partnership aids in the is-sue of securing financing for a project. Financial regulations have caused the approval process for all types of loans to be more difficult. Changes in financial regulations are more difficult to achieve, but public/private partnerships can help to alleviate some of the financial strain for these projects. Providing more educational information will also help banks make more educated decisions on lending and overall polices. However, before being able to provide a rich context-based resource to those participating in mixed-use development, more research must be completed, as described above.

Further, research should be conducted on the interconnectedness of the challenges. For example, the inability to secure financing, delays due to regulations, and lack of labor force may contribute to not being able to meet demand. Neighborhood opposition may affect the opinion of the city planners and how they enforce the local regulations. Local regulations may impact the availability to secure financing through a bank. Other relationships may exist such as these that are unknown. Understanding these connections will further lend itself to the understanding of the cause and more importantly, the solution of these challenges.

Data Availability Statement

The raw data supporting the conclusion of this article will be made available by the authors, without undue reservation.

Ethics Statement

The studies involving human participants were reviewed and approved by Purdue University. The patients/participants provided their written informed consent to participate in this study.

Author Contributions

JM researched and wrote the entire paper.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Anders, M. (2004). Understanding and Balancing Mixed-Use Schemes: The Key to Creating Successful Communities. J. Retail Leis. Property 3 (4), 353–364. doi:10.1057/palgrave.rlp.5090190

CrossRef Full Text | Google Scholar

Baiden, B. K., Price, A. D. F., and Dainty, A. R. J. (2006). The Extent of Team Integration within Construction Projects. Int. J. Project Manag. 24, 13–23. doi:10.1016/j.ijproman.2005.05.001

Beyer, S. (2017). America’s Housing Construction Labor Shortage Continues. Forbes. Retrieved from: https://www.forbes.com/sites/scottbeyer/2017/04/29/americas-housing-construction-labor-shortage-continues/#66de0314706c (Accessed March 9, 2016)

Google Scholar

Brewer, K., and Grant, J. L. (2015). Seeking Density and Mix in the Suburbs: Challenges for Mid-sized Cities. Plann. Theor. Pract. 16 (2), 151–168. doi:10.1080/14649357.2015.1011216

Buildings. (2009). Mixed-use Facilities Are a Productive Use of Space, and They Add viatality to Urban Areas – but Not without Challenges. Retrieved from: http://www.buildings.com/article-details/articleid/9004/title/the-challenges-and-benefits-of-mixed-use-facilities

Chinburg Properies (). Commercial Rental Real Estate: The Top 5 Benefits to Locating Your Business in a Mixed-Use Com-Mercial/Residential Building. Retrieved from: https://chinburg.com/commercial-rental-real-estate-the-top-5-benefits-to-mixed-use-space-for-businesses/ (Accessed March 9, 2016).

City planning. (2016). Dictionary.Com Unabridged. Retrieved from: http://www.dictionary.com/browse/city-planning

Efficient Gov. (2015). Pros & Cons: Mixed-Use Developments. Retrieved from: https://efficientgov.com/blog/2015/06/24/pros-cons-mixed-use-developments/ (Accessed March 9, 2016).

Govindarajan, V., Lev, B., Srivastava, A., and Luminita, E. (2016). The Gap between Large and Small Companies Growing. Why? Harv. Business Rev.

Grant, J. (2002). Mixed Use in Theory and Practice:Canadian Experience with Implementing a Planning Principle. J. Am. Plann. Assoc. 68 (1), 71–84. doi:10.1080/01944360208977192

Grant, J., and Perrott, K. (2011). Where Is the Café? the Challenge of Making Retail Uses Viable in Mixed-Use Suburban Developments. Urban Stud. 48 (1), 177–195. doi:10.1177/0042098009360232

PubMed Abstract | CrossRef Full Text | Google Scholar

Grant, P. (2017). Labor Shortage Squeezes Builders. CNBC. Retrieved from: http://www.foxbusiness.com/features/2017/05/06/labor-shortage-squeezes-builders.html (Accessed March 9, 2016)

Gross, D. (2017). There’s No Such Thing as Jobs Americans Won’t Do. Slate . New York, NY: Retrieved .

Hoppenbrouwer, E., and Louw, E. (2005). Mixed-use Development: Theory and Practice in Amsterdam's Eastern Docklands. Eur. Plann. Stud. 13 (7), 967–983. doi:10.1080/09654310500242048

Koch, D. (2004). Looking up. Retail Traffic 33 (1238–40), 42–43.

Kong, H., Sui, D. Z., Tong, X., and Wang, X. (2015). Paths to Mixed-Use Development: A Case Study of Southern Changping in Beijing, China. Cities 44, 94–103. doi:10.1016/j.cities.2015.01.003

Lamb, I. (2012). Experts Discuss the Benefits of Mixed-Use Development. Retrieved from: http://www.cvilletomorrow.org/news/article/12796-mixed-use-development/ (Accessed March 9, 2016).

Lau, S. S. Y., Giridharan, R., and Ganesan, S. (2005). Multiple and Intensive Land Use: Case Studies in Hong Kong. Habitat Int. 29 (3), 527–546. doi:10.1016/j.habitatint.2004.04.007

Lee, W. (2020). Major Issues in Commuting Efficiency: A Literature Review. Pa. Geographer 58 (1), 25–34.

Leonard, B., and Cumbelich, J. (2014). Mixed Use: A Mixed bag;Whysome Mixed-Use Projects Succeed and Other Fail – the Right Street-Level Retail Can Make All the Difference. Retrieved from: http://www.chainstoreage.com/article/mixed-use-mixed-bag (Accessed March 9, 2016)

Levine, J., and Inam, A. (2004). The Market for Transportation-Land Use Integration: Do Developers Want Smarter Growth Than Regulations Allow? Transportation 31 (4), 409–427. doi:10.1023/B:PORT.0000037086.33893.9f

Mahmoudi Farahani, L., Beynon, D., and Garduno Freeman, C. (2018). The Need for Diversity of Uses in Suburban Neighbourhood Centres. Urban Des. Int. 23 (2), 86–101. doi:10.1057/s41289-017-0052-x

Moore, S. (2013). What's Wrong with Best Practice? Questioning the Typification of New Urbanism. Urban Stud. 50 (11), 2371–2387. doi:10.1177/0042098013478231

National Association of Realtors (2020). Community and Transportation Preference Survey. Retrieved from: https://cdn.nar.realtor/sites/default/files/documents/2020-transportation-survey-analysis-slides.pdf (Accessed March 9, 2016)

Newcomb, T. (2015). Mixed-Use, Multi-Family Projects See Uptick. ENR: Eng. News-Record 275 (13), 69.

Niemira, M. P. (2007). The Concept and Drivers of Mixed-Use Development: Insights from a Cross-Organizational Membership Survey. Res. Rev. 4 (1), 54. Retrieved from: http://www.docstoc.com/docs/38713816/Features-The-Concept-and-Drivers-of-Mixed-Use-Development

Olick, D. (2017).Homebuilders Struggle to Fill Jobs 'Americans Don't Want'. Retrieved from: http://www.cnbc.com/2017/03/29/homebuilders-struggle-to-fill-jobs-americans-dont-want.html (Accessed March 9, 2016)

Rabianski, J., Gibler, K., Tidwell, O. A., and Clements III, J. S. (2009). Mixed-Use Development: A Call for Research. J. Real Estate Lit. 17 (2), 205–230. doi:10.1080/10835547.2009.12090251

Rowley, A. (1996). Mixed-use Development: Ambiguous Concept, Simplistic Analysis and Wishful Thinking? Plann. Pract. Res. 11 (1), 85–98. doi:10.1080/02697459650036477

Slowly, K. (2016). Building a ‘sense of Community’: Why Mixed-Use Developments Are Sprouting up across the US. Retrieved from: http://www.constructiondive.com/news/building-a-sense-of-community-why-mixed-use-developments-are-sprouting-u/421386/ (Accessed March 9, 2016).

Taleai, M., Sharifi, A., Sliuzas, R., and Mesgari, M. (2007). Evaluating the Compatibility of Multi-Functional and Intensive Urban Land Uses. Int. J. Appl. Earth Observation Geoinformation 9 (4), 375–391. doi:10.1016/j.jag.2006.12.002

University of Delaware Delaware Complete Communities Toolbox (n.d.). Benefits of Mixed-Use Development. Retrieved fro: http://sites.udel.edu/completecommunities/planning/landuse/mixed-use-benefits/ (Accessed March 9, 2016).

Urban Land Institute. (2011). Mixed-use Development 101: The Design Mixed-Use Buildings [PowerPoint Slides]. Retrieved from: http://triangle.uli.org/wp-content/uploads/sites/54/2013/01/Design-of-Mixed-Use-Buildings.pdf (Accessed March 9, 2016)

Useful Community Development (2017). Mixed-use Development Delivers Great Benefits. Retrieved from: http://www.useful-community-development.org/mixed-use-development.html (Accessed March 9, 2016)

Valenti, A. (2021). Price Hikes, Labor Shortages Slow Construction Industry’s Recovery . New Orleans: New Orleans CityBusiness .

Woo, Y.-E., and Cho, G.-H. (2018). Impact of the Surrounding Built Environment on Energy Consumption in Mixed-Use Building. Sustainability 10 (3), 832. doi:10.3390/su10030832

Keywords: mixed-use development, regulations, neighborhood opposition, market interest, financing

Citation: Metzinger J (2021) Differences in Experiences With the Development of Mixed-Use Projects From 2004 and 2017. Front. Built Environ. 7:734149. doi: 10.3389/fbuil.2021.734149

Received: 30 June 2021; Accepted: 06 September 2021; Published: 23 September 2021.

Reviewed by:

Copyright © 2021 Metzinger. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Jamie Metzinger, [email protected]

This article is part of the Research Topic

Doctoral Research in Construction Management

Evaluating the challenges and impacts of mixed-use neighborhoods on urban planning: an empirical study of a megacity, Karachi, Pakistan

• Open access
• Published: 07 March 2024
• Volume 5 , article number  24 , ( 2024 )

Cite this article

You have full access to this open access article

• Anila Kausar 1 ,
• Salman Zubair 1 ,
• Hadeeqa Sohail 1 ,
• Muhammad Mushahid Anwar 2 ,
• Asad Aziz 2 ,
• Sergij Vambol 3 ,
• Viola Vambol   ORCID: orcid.org/0000-0002-8229-3956 4 , 5 ,
• Nadeem A. Khan 6 ,
• Serhii Poteriaiko 7 ,
• Vasyl Tyshchenko 7 ,
• Rustam Murasov 8 ,
• Fizza Ejaz 1 &
• Owais Iqbal Khan 9  

1162 Accesses

Explore all metrics

Introduction

Modern development is patented by rapid urbanization, which largely negatively affects the quality of life. Over the past few decades in the World; in the field of urban planning and the real estate market, Mixed-use development has become a Centre of attention. Karachi is the mega city with the highest population in Pakistan. Gulshan-e Iqbal is considered an upper to upper-middle-class income group residential place where mostly vertical development is observed. Soon the area gets popular for living, and road-facing flats started to engage in Residential cum commercial activities i.e., mixed-used development problems (traffic jams, people's regular mobility, etc.) for residents arose and as the area got crowded day by day these problems became more critical. The present research aimed to examine the land-use type, and its distribution in the area of Gulshan-e-Iqbal I, and investigate the causes of the failure of Mixed-Use Neighborhood development and to prove the problem environmental impact assessment of the area have also been done.

Materials and methods

Object-based analyses have been conducted on a very high-resolution image of the SAS planet, Digitization has been done on the image later classified into 14 major classes. After attempting the strategic objective identification of issues causing Mobility, an inductive approach (Resident Survey) to analyze the resident perception and to validate issues raised due to mixed-use development, Environmental Impact Analysis has been done. Air Quality of study area has been done, in this regard PM 10 ppm, PM 1 ppm, PM 2.5, CO, CO2, and TVOC have been conducted for different timings. Wind Velocity has also been recorded for the same locations.

Results and discussion

It has been investigated that mixed-use development is spread over the entire area by different ratios i.e., 7.3% by functional land-use, 24% of mixed-use development occupied 24% of total land-use in the area. From public perception, it is concluded that most people have their cars even more than two, and 66.7% park their cars on the streets rather than inside their premises. PM10 ppm values are higher along major roads and expressways and mixed-use development zones. PM2.5 reading is higher (249–267 ppm) at the mixed-use development. The overall Gulshan e Iqbal 1 is under the influence of PM1 pollution i.e., ranged from 153 to 248 ppm. The maximum emission (67–73 ppm) of Carbon monoxide is found at ATMs. The vast spread of CO2 in the atmosphere but along the main roads and interjections i.e., 342 ppm while the highest reading reached up to 800. TVOC is commonly found in congested places where there is more transport in limited areas. Wind velocity is found where the built-up structure is compact wind velocity is ultimately low but the concentration of pollution is higher.

Conclusions and recommendations

This study will be helpful to plan a suitable planning strategy to reduce the daily havoc generated by the constant flux of traffic, for urban development and sustainability.

Similar content being viewed by others

Assessing the Effects of Different Urban Forms on Social Sustainability: The Case of Tehran

Geo-spatial Assessment of Inherent Smart Urban Attributes of Traditional Neighborhood-Level Communities in India

The Residential Quality in the “Hidden” Roma Neighbourhoods: A Case Study of Harman Mahala, Plovdiv

Avoid common mistakes on your manuscript.

1 Introduction

1.1 urbanization and city planning.

Modern development is characterized by rapid urbanization, which to a large extent negatively affects the quality of life, such as the health of the population [ 14 , 20 ], water and soil quality [ 22 , 35 ], food quality [ 27 , 29 ] and the amount of waste [ 13 ] in the absence of proper controls. In urban planning and the real estate market in the world Mixed-use development became a center phase over the past few decades [ 34 ]. The vision towards the mixing land use is the pervasive constituent for activities to upgrade the built-up environment established under the notion of new urbanism, smart growth, or the compact city [ 10 ].

1.2 Smart cities

For smart growth of cities worldwide, a positive sign of growth is Mixed-used development [ 28 ] and [ 3 ], which is implemented as an essential planning strategy [ 39 ]. Cities containing commercial neighborhood that provides services and exhibit liveliness are considered functional urban components in a certain city in the known history [ 32 ] and [ 8 ]. Therefore, the values cities had mixed uses that created opportunities for their residents [ 9 ]. Mixed-use development in European countries is usually found in city planning in their land-use planning in contrast to the “USA” where zoning separates each land-use in a variety of ways [ 19 ] and [ 28 ]. For example, the mixed-use development in Saddar-Karachi is adopted for commercialization, institutional activities, and social gathering and co-exists with residential areas [ 43 ].

1.3 Mixed-use development in Gulshan-e-Iqbal

The Gulshan-e-Iqbal town is generally associated to the vertical mixed-use development, i.e., residential cum commercial activities along with other functional activities. Before the year 2011, Gulshan-e-Iqbal known as Gulshan Town Borough was established for residential purposes under Scheme 24 (A development scheme by the Local Government). According to this scheme, the vertical grouping of housing schemes is integrated where commercial areas are on the 1st floor while residential areas lie on their top/upper floors. In Gulshan-e-Iqbal commercial activities are mostly found on the ground floor while residential flats are on the above floors.

In Gulshan-e-Iqbal commercial activities are mostly found on the ground floor while residential flats are on the above floors. Such types of structures encountered a major issue, i.e., parking [ 9 ]. For residential cum commercial activities, proper planning of a car park is required [ 16 ]. The ideal structure for parking the car is large rectangular-shaped sites generally flat sites are more economical [ 1 ]. It has been investigated that the land-use classification on land-based standards, provides forceful tools for local land planning determinations [ 46 ] and [ 23 ]. Gulshan-e-Iqbal I is the area which is developed before all other areas of Gulshan-e-Iqbal. In the beginning, all areas within or surrounding were underdeveloped or vacant and the areas developed gradually so the residents' problems increased day by day with the intensity of built-up structures. There are many problems now Gulshan-e-Iqbal is facing e.g. traffic congestion, mobility issues arising due to the commercial activities within the residential areas, issues with parking facilities, etc. This study will not only help identify such problems but also confirm the said issues. The introduction of planning strategies e.g. Introduction of Parking facilities etc. will give Gulshan-e-Iqbal’s residents a better lifestyle once again.

The strategic objective of the study is to prove that mixed-use development is creating havoc in terms of traffic congestion. The following objectives have been designed for investigating the problem.

To conduct Object-based analyses on a very high-resolution image of the SAS planet for calculating the land-use land cover of Gulshan-e-Iqbal I.

To identify issues causing Mobility.

To apply an inductive approach (Resident Survey) to notice resident perception.

To validate issues raised due to mixed-use development through Environmental Impact Analysis

2 Review of literature

In the world, urbanization is a major force to change physical, social, and economic changes worldwide [ 34 ], which directly and indirectly causes several changes on a large scale. In this scenario, the concept of mixed land use has been adopted to fill the gaps developed by residential vacancy and community decline [ 31 ]. In a healthy community, the concept of mixed land uses (MLU) is one of the most forceful tools and parameters of land use morphology and is considered a desirable model for building a livable and healthy community [ 23 ]. However, to achieve the goal of sustainable land use planning most of the countries in the developing world as still unable to adopt and practice this modeling in their regions, particularly in megacities [ 11 ].

Among the community of researchers, and land use managers, the mixed land use concept are disputed [ 33 ]. The reason behind this is the lack of urban planning and community restrictions in most particular regions in residential areas. This impact of disputation generates positive and negative effects including privacy concerns as negative effects and having a grocery store and market within 300 feet near to a settlement is considered a positive impact [ 40 ].

Mixed land use provides proximity and accessibility to local urban dwellers in terms of low usage of transportation, easy commenting, and walkable distance to neighborhood services like markets and platforms for cycling [ 6 ]. Because in the urban world proximity to neighborhood services is a fundamental part of sustainable urban planning and economic management [ 15 , 44 ]. Therefore, it is necessary to follow the pattern of mixed land use while making decisions related to land management in urban areas [ 37 ]. In high-density areas, mixed land use and neighborhood amenities provide the best way to approach the surrounding facilities [ 42 ]. The people who live close to proximity with each other can better engage with social, and ethical values that will lead to improved quality of life [ 12 ].

The increase in population particularly in urban areas leads to many challenges in the world including congested urban road networks [ 12 ]. Along with this also cause traffic jams, resource depletion, and loss of biodiversity due to the conversion of natural areas into built-up [ 41 ]. These issues restrict sustainable urban development and regional sustainability [ 42 ]. For decades, even after “world war-II’ the scenarios of urban sprawl, population change, and migration pattern change very shape a very complex morphology of urban areas [ 15 , 44 ]. This complex pattern results in an inadequate understanding of issues faced by the population and policy implementation. Therefore, for improving land management at a regional scale it is necessary to develop a land use model with mixed land use strategies not only in this area but even for the developing world to minimize the problems faced by the population due to urbanization.

Overall the concept of mixed land use is so striking and developed world is in favour of mixed use development. But the area like Karachi where city is developed with population rise urban planning strategies are always transforming to survival of the fittest strategy. Therefore this is the genuine problem of developing world. Other developing countries with rapidly growing populations, such as India, may face similar problems.

Unfortunately, the problem of multifunctional urban development with high population density is developing much faster than scientific research into the current problem and the development of solutions to reduce/eliminate it. To date, the authors of the current work have identified no research studies in this area that seek to achieve similar goals. However, the search was not limited to any criteria.

3 Methodology

The current research study has been done in the period of 15 September 2022 to 15 January 2023. The research is novel in nature and data acquired during 4 months of Gulshan-e-Iqbal I is primary. The results of the study and land-use surveying of the study area provide better planning opportunities and strategies for future land-use modeling to achieve the sustainable land development of the mega city of Pakistan along with the developing world.

Gulshan-e-Iqbal is located in the central location of Karachi (Fig.  1 a). It is the largest area of Karachi where a large portion of the city population lives in flats and most of the road-facing flats are mixed-use developments [ 18 ]. The area coverage is about 94.76 km 2 (Fig.  1 ). Gulshan-e-Iqbal comprises 14 subdivisions i.e., termed as union councils namely Gulshan-e-Iqbal I, Gulshan-e-Iqbal II, Pehelwan Goth, Safooran, Gulzar-e-Hijri, Metroville Colony, Dehli Mercantile Society, Civic Centre, PIB Colony, Essa Nagri, Jamali Colony, Geelani Railway Station, Shanti Nagar, and Faisal Cantonment.

Map of study area Gulshan-e-Iqbal, Karachi Pakistan

3.1 Study plan

The research uses a methodological framework comprised of the following steps involved:

the first step is the Object-based Analysis of the SAS planet image;

the second phase of the study examines the Land-use Classification for Geographic Information System (GIS) analysis of land in the study area. This should contribute to clarify the ground reality and local issues faced by the population;

on the third step, a pilot study to confirm the proposed objectives of the study were done;

finally, Questionnaire-Based Survey was done by random sampling to achieve the target.

Object-based analyses have been conducted on a very high-resolution image of the SAS planet [ 45 ]. Objects are identified through controlled methods in a GIS environment [ 25 ]. In the study, the land use in the area was digitized and geo-coded through Google Earth and Google Maps later, this information is cross-checked through the ground truthing method of surveying. Land use that has been identified through object-based analysis is further classified into different classes as shown in (Table  1 ).

Detailed field surveys on the method of land-based surveying have been conducted on selected study areas. Surveyors have cross-checked the results of object-based analyses in the field (Table  2 ). Online Surveying techniques have been used for conducting questionnaire-based surveys, particularly with the residents of Gulshan-e-Iqbal.

Interpolation and Extrapolation techniques have been used to analyze Environmental Data through ArcGIS software (Fig.  2 ). Along with driving forces also accessed. “UNI T UT338C air quality meter” for CO and CO 2 detection, “Air Quality Detector Model JSM-131 SC”, “Voltage SV”, “Standard JJF10591-2012, JJG 1022–2016”, to record total volatile organic compounds (TVOC) pollution, “Air Quality Meter UNI-T UT338C Meter PM2.5 Air Quality Humidity Detector” to record fine particulate matter (PM2.5) in air was used during surveyof study area.

Environmental impact analysis through ArcGIS

4.1 Land use land cover assessment

Gulshan-e-Iqbal encompasses 1,414,770 m 2 (1.414 km 2 ) of area. Among that 545,136 m 2 area is occupied by residential blocks, and Commercial area occupancy is 54,553 m 2 (Fig.  3 ). Major roads include University Road, Allama Shabbir Ahmed Usmani Road, and Rashid Minhas Road while main Roads like Sardar Ali Sabri Road, Shahrah e Al Quds, Umraoo Tariq Road, and Lyari Expressway (LEW) are the silent roads serving the area. Two Flyovers e.g., at Nipa Chowrangi, and Gulshan Chorangi collective experience immense traffic flow which caused traffic jams and bottleneck issues most of the time. The concentration of commercial and residential cum commercial areas is also on the road facing, and even along the streets.

Gulshan-e-Iqbal I: land-use land cover (LULC)

Two flyovers e.g., at Nipa Chowrangi, and Gulshan Chorangi collective experience immense traffic flow which caused traffic jams and bottleneck issues most of the time. The concentration of commercial and residential cum commercial areas is also on the road facing, and even along the streets. In the study area land-use occupied by Residential, Commercial, Mixed-use Development (Residential cum commercial), Educational institutions, Social (Welfare), Industry, Health, Leisure, Mass Assembly of People, Travel and movement (Exclude Major, Minor roads/street area), Natural Resources Based, Man-Made Green Infrastructure.

Approximately 47.6% (Table  3 ) of residents are living in Gulshan-e-Iqbal I (Fig.  4 ). While commercial land use is only 6% (Table  3 ) of land in combination with 7% (Table  3 ) of the land is the occupancy of Mixed-used development (Fig.  4 ) in which residential cum commercial flats.

Gulshan-e-Iqbal I: land-use causing mobility issues

4.2 Land use causing mobility issue

If commercial and mixed-use development combines its total will be 11%, and this percentage creates different issues for the residents of Gulshan-e-Iqbal I facing the foremost issue of traffic congestion. The ground floors of the flats mostly comprise wholesale shops, food business-related shops, and automobile shops, filling the area with a congested population, especially in the evening timings/peak hours. Various educational institutions are located, including coaching centres, English Language Centres, Diploma Institutes and Academies, Schools, Colleges, Universities of Karachi, and Libraries also cause this congestion. Though the total coverage area of educational institutions is comparatively less (2% approx.) than residential blocks, its influence is tremendous, especially in institutional peak hours as well as also haste situations on the Travel and Movement land use including service roads and car parking.

The share of travelling pathways and movement in total land use in Gulshan-e-Iqbal I is 12% approx. In which the share of car parking and service roads are 8.3% and, 3.8% respectively.

Another land-use type also has an impact on Travel and Movement activities, i.e., Mass Assembly of People (MAP). In other the land use categories are Masjid (worship place), Madrassah (place of teaching Quran), Dargah, Khanqah Marriage Halls, and other gathering places. Collectively the coverage area of the MAP is 1.5% only, but its influence in terms of transit is also equivalent to educational institutions, commercial, and mixed-use development 6% coverage area of Leisure land-use type, comprises Sports-related (Playgrounds, etc.), Gyms, Parks, and Community Gardens. 10.24% of the land is under Man-Made Green Infrastructure. It shows recent planning strategies to reduce the carbon footprints of the study area. The whole Gulshan-e-Iqbal I land is almost completely used under different types of land uses except only 2 percent of the land is vacant which introduce in the current study as a natural resource that can be used for car parking in the future.

Collectively Commercial, Mixed-used Development, Industrial, Educational Institutions, Social/Welfare offices, Health-related Institutions, Government Offices, and Leisure, land-uses which are collectively involved in functional activity are subject to mobility crises.

The total percentage of these land uses is 2 \(3.8\%\cong\) 24%, which reflects the situation of the daily havoc of congested space created in Gulshan-e-Iqbal I (Fig.  5 ). It is evident from Fig.  5 , these activities are distributed throughout all of the study areas which ultimately causes mobility issues.

Gulshan-e-Iqbal I: car parks (parking lots)

Mobility issues create congestion problems. This issue becomes more vulnerable due to less car parking facilities. Figure  6 , mentioned the areas where vehicles are parked. In Gulshan-e-Iqbal I the car parking facilities are only about 8.3% (Table  3 ) of land which is negligible as the region is frequently used for different purposes mentioned clearly in Fig.  5 .

Major problems of Gulshan-e-Iqbal

4.3 Resident perception

The questionnaire has been conducted to look into the ground realities of residents of Gulshan-e-Iqbal. The survey was conducted through random sampling in the study area. A total of 159 respondents responded to the survey and results have been shown by using Fig.  6 . Among them, 53% are male while 47% are female, 55.3% of respondents belong to the 20–25 years of age group. 29.6%, 25%, 5%, 15.1% and 28.9, living in Gulshan-e-Iqbal before Years 2000, 2000–2005,2005–2010, 2010–2015, 2020 and till now. Among them, 48% of residents live in 120 square yards of homes. 31.6% of people came to this area because of its appropriate system on the one hand, while 25.7% were attracted here because of its beauty and cleanness on the other hand. Now the respondents are facing many problems, among them major issues are parking due to commercial areas (24.2%), unavailability of clean water (25.5%), crime rates have risen (26.8%), and other social issues (street crime, etc.), (23.5%).

To meet the unavailability of tap water 31.6% used boring water, while 27% purchased tankers to fulfil their water needs. 41.4% of respondents did not have water issues and water availability is appropriate in the area. The tap water is not clean in the area for this reason 84.7% of people use mineral water and among the mineral water users, 81.7% got mineral water from their nearest water Reverse Osmosis (RO), Plant installed in the area. It is estimated that 65.4% of residents feel trouble due to commercial strips i.e., residential cum commercial buildings (mixed-use development), and the reasons are traffic jams (56.5%), high transit areas due to commercial strips (15.6%) while 27.9% still like the way the area is, and believe in living in the more convenient situation instead of any trouble.

There are different shops in residential cum commercial flats, mostly on the ground floor. Respondents were asked to remove any one type of commercial activity if they have the right to do so. They were also asked what shop it will be.

Responses are of great variety, but mostly believe:

47.7% are in favour of the removal of auto shops (car mechanic shops)

37.1% are in favour of removal of restaurants (food business-based shops), etc.

While the remaining 15.2% consider removing street hawkers, department stores like Chase or Imtiaz Mall (private shopping mall) have some specific days to open, public vehicles occupying unnecessary place affront of these commercial and residential cum commercial areas, etc. In addition to such problems, as this area is the residence of high-income groups 64.1% of residents are an owner of at least one car, 23.9% have two cars, and, 12% have more than two cars. Among them, 66.7% park their cars on streets in affront of their houses. This behavior negatively impacts the smooth traffic flow.

4.4 Traffic congestion and environmental impact analysis

Traffic congestion affects the Air Quality of the study area, but its impact on the overall environment can never be undervalued. Air Quality of study area has been done, in this regard PM 10 ppm, PM 1 ppm, PM 2.5, CO, CO2, and TVOC have been conducted for different timings. Wind Velocity has also been recorded for the same locations. As due to wind movement, the air quality of surrounding areas within the Megacity will also be affected. 18 locations have been selected (Appendix 1). Apart from Locations 8, 10, and 17, all locations are along the roads, or along the mixed-use development. In Table  4 there are 18 locations where the data have been recorded and through this recorded data interpolation techniques have been used to generate results.

PM10 ppm values are higher along the major roads and express ways, as locations 8 and 9 (Fig.  7 -1) are along the LEW (Layari Express Way) than Location (LOC) 16 (Fig.  7 -1) where a number of coaching centres and educational institutions are located have high concentrations of PM10 ranging from 281 to 296 ppm (Fig.  7 -1).at LOC 5 (Gulshan Chowrangi) the concentration is 218 relatively lower than the previous location (LOC 16) even though both LOCs are on the same road. But at Gulshan Chowrangi the movement of vehicles is interrupted and relatively smoother than at LOC 16 (Fig.  7 -1). Another method is also applied to identify the problem is expanding over a large area if we use the technique of extrapolation on recent data on the range of PM 10 affecting the large surroundings of Gulshan e Iqbal 1 (Fig.  7 -2).

Gulshan-e-Iqbal I PM10: 1. Interpolation and 2. Extrapolation

LOC 17 is the reading taken a front of Webex Zone, though the ground control point is not adjacent to the road network, and it is a central location residential block, but this is the region where there is a commercial lane Fig.  8 . Along the Webex zone. Hence, the location is under a high mobility are the source of contamination of the environment and vice versa.

Site and situation of LOC 17

Figure  9 -2 is showing a contagious loop of PM2.5 and their source points are LOCs 2, 17 and 5 and this pollutant containing loops extend beyond the limits of Gulshan e Iqbal I. two major roads University Road and Rashid Minhas Road the sources but as already explain the strong and concentrated loop of PM2.5 is not along the road but surrounds by residential region i.e., ranged from 249.1 to 261 ppm. According to Kausar et al., (2023) if the AQI ranges from 201 to 300 it means Air Pollution level is very unhealthy and cautionary statement is “not good for everyone”.

Gulshan-e-Iqbal I PM2.5: 1. Interpolation and 2. Extrapolation

The overall Gulshan e Iqbal 1 is under the influence of PM1 pollution (Fig.  10 ). Therefore, it is clearly seen the contamination level of approximately whole area ranged from 153 to 248 ppm. The highest readings are found at LOC 8, 16, 15, 5, and 17 248 ppm, 236 ppm 230 ppm, 214 ppm and 202 respectively. While contagious pollution is spread over the extensive area of Gulshan e Iqbal 1. The whole area is under the influence of PM1 contamination.

Gulshan-e-Iqbal I PM1: 1. Interpolation and 2. Extrapolation

Figures  11 and 12 are showing interpolation and extrapolation of the CO and CO2 concentration in the environment. The maximum emission of Carbon Mono Oxide is found at LOCs 3 and 10, LOC 10 was a front of a Bank and a front of this bank there is place of Car Parking as well. Overall, the remaining area is not highly commercialized but a Bank people used to visit at ATM and left cars and bikes with the engine on, therefore at this time half combustion process is continually going on. This half combustion is incomplete combustion and according to ScienceDirect [ 38 ] it is the general term which refers to carbon impurity and form due to incomplete combustion of hydrocarbon. LOCs 8 and 3 also showing the same manner. At LOC 8 there is a big superstore where there is a rush almost from every opening time till.

Gulshan-e-Iqbal I CO: 1. Interpolation and 2. Extrapolation

Gulshan-e-Iqbal I CO2: 1. Interpolation and 2. Extrapolation

Closing time. It is one of the highly transportable zones. LOC 3 is at University Road, at this spot there is a way under the bridge from where vehicles are constantly slower down their speeds due to the road sharp bend. Therefore, once again, half combustion process has been taken place. Figure  11 -2 is showing overall extent of CO spread.

Figure  12 is showing the vast spread of CO2 in the atmosphere but along the main roads and interjections. Overall, whole area is under the unfathomable stimulus of CO2 emission. This is the major evidence of a highly mobilized zone. The minimum reading of CO2 itself high reading, i.e., 342 ppm while the highest reading reached up to 800. It’s really a vulnerable reading. CO2 is included in Greenhouse gases and its higher levels in atmosphere may cause in temperature rise.

TVOC is the Total Volatile Organic Compounds is commonly found at the congested places where there is a more transport in the limited area (Fig.  13 ), the places comparatively less ventilated where winds got trapped. To validate the statement wind speed at different Locations of the same area have also been identified and by comparing both Figs.  13 and Fig.  14 where the wind is not present or very less here TVOC found more.

Gulshan-e-Iqbal I TVOC: 1. Interpolation and 2. Extrapolation

Gulshan-e-Iqbal I Wind Velocity: 1. Interpolation and 2. Extrapolation

5 Suggestions and recommendations

Karachi, the biggest city in Pakistan, currently faces rapid urban expansion like the other megacities of developing countries [ 36 ]. Industrialization, caused this rapid change in land use and settlement patterns when the population from surrounding areas move towards the urban areas. It has previously been investigated that mixed land use patterns, contribute to the land development in thickly populated areas in the urban world [ 24 ]. However, this pattern needs more time to be adopted by the urban world in the least developing countries till the time. The rapid population growth rate creates challenges for urban managers, planners, and policymakers to provide facilities to the urban population [ 26 ]. To accommodate the population flux and fill the demands with the local population, the concept of mixed land use is considered a fundamental need of Gulshan-e-Iqbal I as a congested area of the city.

Mixed land use is considered as proximity to neighbourhood services and pedestrian-friendly in the concept of neighbourhood services in dense urban networks [ 17 ] and [ 7 ]. It is considered a versatile feature of the urban world for the advancement of the city [ 30 ]. This concept is the combination of social, economic, ecological, and real estate factors for sustainable urban development and economic diversity [ 4 ]. The results show that the area still needs more mixed land use pattern that should be adopted by every individual in the area to minimize the problems daily faced by the local community, including traffic jam and population conjunction. The government should take stick action to drive policy for new urban built-up to design their infrastructure for mixed land use strategies.

For developing countries, the concept of mixed land use is a fundamental need for sustainable urban planning, especially in congested urban networks [ 5 ]. As it provides social, economic, and political services in an accessible approach. The idea of mixed land use is a coping strategy to solve land management issues [ 48 ], including inefficient utilization of resources, unordered expansion, and the decay of old cities [ 47 ] and [ 21 ]. Despite the growing concept of mixed land use in land use management, this idea still needs more in-depth research with theoretical and practical background [ 2 ] and [ 15 , 44 ]. It is concluded that city planners should adopt the policy of mixed land use to overcome the issues created by congested urban networks to gain sustainable urban development.

Gulshan e Iqbal 1 is the model example of congestion. The area is over all residence of high-income group but due to its early development the mixed-use development not appropriately handled. Therefore, there is a dire need to cop up with the issue. Similar situations arise in many cities around the world, which require an immediate response from decision makers in the field of infrastructure and the environment.

Green spaces cope well with air pollution and also have a beneficial effect on people’s psyche, which helps reduce stress due to the external pressure of uncomfortable infrastructure and avoid depression. Therefore, the most rational way is to introduce Greenways. In addition to this, greening of roofs and terraces should be encouraged and promoted.

6 Conclusions

Gulshan-e-Iqbal I is a congested area with high mobility and a dense region of concrete buildings. Main roads facing blocks have residential cum commercial, commercial, educational, and health-related infrastructure, which causes high mobility most of the daytime and late at night during peak hours. Approximately 24% area is involved in functional activities, but due to fewer parking facilities, this area is facing traffic congestion and frequent bottlenecks around. 47.6% area is occupied for residential purposes. The mixed-use neighbourhood did not have sufficient parking lots/ car parking/parking spaces. Overall, study areas have 8.3% parking spaces. Together, Commercial, Mixed-used Development, Industrial, Educational Institutions, Social/Welfare offices, Health-related Institutions, Government Offices, and Leisure have a daily flux of people. Residents’ perceptions regarding mobility issues have similar dimensions as investigated through the land-based surveying and i.e., commercial strips/ mixed-use development causing trouble (65.4%) along with traffic jams (56.5%), and high transit situation due to mixed-use development (15.6%).

To alleviate the problems of the Gulshan-e-Iqbal I the prime suggestion is to improve the land-use structure of the study area. The only solution is for buildings with mixed-use development to introduce car parking facilities on the upper floors. Educational institutes introduce parking spaces within their premises or develop infrastructure that introduces parking spaces. Unauthorized stalls and sitting places a front of restaurants/tea houses should be removed or incorporated properly. Main roads also have heavy traffic flow, the government should take responsibility for traffic jams on the main roads or introduce service roads where it can be possible to maintain.

PM10 ppm values are higher along major roads and expressways. PM10 ranges from 281 to 296 ppm along the institutional buildings. It reflects these areas are the busiest spots for automobiles.

Megacities and other densely populated developing countries are likely to face similar problems. However, literary analysis did not reveal publications aimed at studying this problem, and therefore, there is no way to identify commonality or differences in approaches to solving it in other cities. We hope that the current study will stimulate similar research in other countries to further jointly develop actions aimed at ensuring the comfort of the population and reducing negative environmental consequences.

Data availability

Data sets generated during the current study are available from the corresponding author on reasonable request. The land use land cover data is available from surveys conducted, but restrictions apply to the availability of these data, but all data will be provided if required.

Ali MM, Al-Kodmany K. Tall buildings and urban habitat of the 21st century: a global perspective. Buildings. 2012;2(4):384–423. https://doi.org/10.3390/buildings2040384 .

Article   Google Scholar  

Almansoub Y, Zhong M, Raza A, Safdar M, Dahou A, Al-qaness MA. Exploring the effects of transportation supply on mixed land-use at the parcel level. Land. 2022;11(6):797. https://doi.org/10.3390/land11060797 .

Amiri BA, LuNumwena N. The emergence of smart growth in developed and developing countries and its possible application in Kabul City, Afghanistan. Int J Urban Civ Eng. 2018;12(3):371–6.

Google Scholar  

Anwar MM, Fayyaz F, Aziz A, Mahmood MR. Socio-ecological and ethical economic demand of urban parks in Gujrat City, Punjab, Pakistan. Arid Ecosyst. 2021;11(2):141–8.

Article   CAS   Google Scholar  

Aziz A, Anwar MM. Landscape change and human environment. Environ Earth Ecol. 2019;3(1):7–12. https://doi.org/10.24051/eee/110396 .

Aziz A, Anwar MM, Dawood M. The impact of neighborhood services on land values: an estimation through the hedonic pricing model. GeoJournal. 2021;86:1915–25. https://doi.org/10.1007/s10708-019-10127-w .

Aziz A, Anwar MM, Abdo HG, Almohamad H, Al Dughairi AA, Al-Mutiry M. Proximity to neighborhood services and property values in urban area: an evaluation through the hedonic pricing model. Land. 2023;12(4):859. https://doi.org/10.3390/land12040859 .

Beirão JN, Koltsova A. The effects of territorial depth on the liveliness of streets. Nexus Netw J. 2015;17:73–102. https://doi.org/10.1007/s00004-014-0233-5 .

Bibri SE, Krogstie J. Data-driven smart sustainable cities of the future: a novel model of urbanism and its core dimensions, strategies, and solutions. J Futures Stud. 2021;25(2):77–94. https://doi.org/10.6531/JFS.202012_25(2).0009 .

Bibri SE, Krogstie J, Kärrholm M. Compact city planning and development: emerging practices and strategies for achieving the goals of sustainability. Dev Built Environ. 2020;4: 100021. https://doi.org/10.1016/j.dibe.2020.100021 .

Cervero R. Mixed land-uses and commuting: evidence from the American Housing Survey. Transp Res Part A: Policy Pract. 1996;30(5):361–77. https://doi.org/10.1016/0965-8564(95)00033-X .

Christodoulou A, Christidis P. Evaluating congestion in urban areas: the case of Seville. Res Transp Bus Manag. 2021;39: 100577.

Czekała W, Łukomska A, Pulka J, Bojarski W, Pochwatka P, Kowalczyk-Juśko A, et al. Waste-to-energy: biogas potential of waste from coffee production and consumption. Energy. 2023;276: 127604. https://doi.org/10.1016/j.energy.2023.127604 .

Dong H, Xue M, Xiao Y, Liu Y. Do carbon emissions impact the health of residents? Considering China’s industrialization and urbanization. Sci Total Environ. 2021;758: 143688. https://doi.org/10.1016/j.scitotenv.2020.143688 .

Article   ADS   CAS   PubMed   Google Scholar  

Yang F, Wen X, Aziz A, Luhach AK. The need for local adaptation of smart infrastructure for sustainable economic management. Environ Impact Assess Rev. 2021;88: 106565. https://doi.org/10.1016/j.eiar.2021.106565 .

Garang Z, Wu C, Li G, Zhuo Y, Xu Z. Spatio-temporal non-stationarity and its influencing factors of commercial land price: a case study of Hangzhou, China. Land. 2021;10(3):317. https://doi.org/10.3390/land10030317 .

Ghosh P, Raval P. Case studies of mixed land use policies. Pune, Urban Infrastructure Development and Management, ICCRIP 2018, NICMAR, Pune. 2018.

Hasan A. Land contestation in Karachi and the impact on housing and urban development. 2018(0956–2478 (Print)).

Hirt S. Mixed use by default: how the Europeans (don’t) zone. J Plan Lit. 2012;27(4):375–93. https://doi.org/10.1177/08854122124510 .

Hrynzovskyi AM, Holovanova IA, Omelchuk ST, Kuzminska OV, Hrynzovska AA, Karlova OO, Kondratiuk VY. Public health and social supervision issues within public administration of ukrainian territories in the late 8th-early 9th centuries. Wiadomosci Lekarskie (Warsaw, Poland:1960). 2018;71(1 pt 2):246–51.

PubMed   Google Scholar  

Iannillo A, Fasolino I. Land-use mix and urban sustainability: benefits and indicators analysis. Sustainability. 2021;13(23):13460. https://doi.org/10.3390/su132313460 .

Jucherski A, Walczowski A, Bugajski P, Jóźwiakowski K, Rodziewicz J, Janczukowicz W, et al. Long-term operating conditions for different sorption materials to capture phosphate from domestic wastewater. Sustain Mater Technol. 2022;31: e00385. https://doi.org/10.1016/j.susmat.2021.e00385 .

Kausar A, Afsar S, Wazir Z, Lahori AH, Afzal A, Arif J, et al. Land use analysis of Central Business District (CBD) of Metropolis Saddar Karachi through SRS/GIS techniques. Ecol Quest. 2022;33(1):91–101. https://doi.org/10.12775/EQ.2022.009 .

Kleemann J, Inkoom JN, Thiel M, Shankar S, Lautenbach S, Fürst C. Peri-urban land use pattern and its relation to land use planning in Ghana, West Africa. Landsc Urban Plan. 2017;165:280–94. https://doi.org/10.1016/j.landurbplan.2017.02.004 .

Klimešová D. Control GIS and geo-information modelling. In Proceedings of the 8th WSEAS international conference on automatic control, modeling and simulation. 2006. pp. 97–102.

Korah PI, Nunbogu AM, Akanbang BAA. Spatio-temporal dynamics and livelihoods transformation in Wa, Ghana. Land Use Policy. 2018;77:174–85. https://doi.org/10.1016/j.landusepol.2018.05.039 .

Krochmal-Marczak B, Sawicka B. The influence of cooking on the antioxidant properties and polyphenol content in buckwheat, barley and millet groats and the transfer of the compounds to the water. Potravinarstvo Slovak J Food Sci. 2019;13(1):759–66. https://doi.org/10.5219/1171 .

Kusiluka MM, Chiwambo DM. Acceptability of residential licences as quasi-land ownership documents: evidence from Tanzania. Land Use Policy. 2019;85:176–82. https://doi.org/10.1016/j.landusepol.2019.02.044 .

Kuzminska E, Omelchuk S, Karlova E, Grinzovskyy A. Drug-free modalities of irom deficiency conditions in Ukraine. Georgian Med News. 2018;6(279):175–80.

Li Q, Chen X, Jiao S, Song W, Zong W, Niu Y. Can mixed land use reduce CO2 emissions? A case study of 268 Chinese cities. Sustainability. 2022;14(22):15117. https://doi.org/10.3390/su142215117 .

Ma W, Jiang G, Zhou T, Zhang R. Mixed land uses and community decline: opportunities and challenges for mitigating residential vacancy in peri-urban villages of China. Front Environ Sci. 2022;10: 887988. https://doi.org/10.3389/fenvs.2022.887988 .

Mandeli K. Public space and the challenge of urban transformation in cities of emerging economies: Jeddah case study. Cities. 2019;95: 102409. https://doi.org/10.1016/j.cities.2019.102409 .

Nabil NA, Abd Eldayem GE. Influence of mixed land-use on realizing the social capital. HBRC J. 2015;11(2):285–98. https://doi.org/10.1016/j.hbrcj.2014.03.009 .

Peter LL, Yang Y. Urban planning historical review of master plans and the way towards a sustainable city: Dar es Salaam, Tanzania. Front Arch Res. 2019;8(3):359–77. https://doi.org/10.1016/j.foar.2019.01.008 .

Qiao W, Huang X. The impact of land urbanization on ecosystem health in the Yangtze River Delta urban agglomerations. China Cities. 2022;130: 103981. https://doi.org/10.1016/j.cities.2022.103981 .

Qureshi S. The fast growing megacity Karachi as a frontier of environmental challenges: urbanization and contemporary urbanism issues. J Geogr Reg Plann. 2010;3(11):306.

Raman R, Roy UK. Taxonomy of urban mixed land use planning. Land Use Policy. 2019;88: 104102. https://doi.org/10.1016/j.landusepol.2019.104102 .

ScienceDirect. Incomplete Combustion. 202. https://www.sciencedirect.com/topics/engineering/incomplete-combustion .

Shawly H. Evaluating compact city model implementation as a sustainable urban development tool to control urban sprawl in the city of Jeddah. Sustainability. 2022;14(20):13218. https://doi.org/10.3390/su142013218 .

Song Y, Knaap GJ. Measuring the effects of mixed land uses on housing values. Reg Sci Urban Econ. 2004;34(6):663–80. https://doi.org/10.1016/j.regsciurbeco.2004.02.003 .

Surya B, Salim A, Hernita H, Suriani S, Menne F, Rasyidi ES. Land use change, urban agglomeration, and urban sprawl: a sustainable development perspective of Makassar City, Indonesia. Land. 2021;10(6):556. https://doi.org/10.3390/land10060556 .

Tian Y, Mao Q. The effect of regional integration on urban sprawl in urban agglomeration areas: a case study of the Yangtze River Delta, China. Habitat Int. 2022;130: 102695. https://doi.org/10.1016/j.habitatint.2022.102695 .

Wang D, Schwanen T, Mao Z. Does exposure to richer and poorer neighborhoods influence wellbeing? Cities. 2019;95: 102408. https://doi.org/10.1016/j.cities.2019.102408 .

Yang H, Fu M, Wang L, Tang F. Mixed land use evaluation and its impact on housing prices in Beijing based on multi-source big data. Land. 2021;10(10):1103. https://doi.org/10.3390/land10101103 .

Yurtseven H, Yener H. Using of high-resolution satellite images in object-based image analysis. Eurasian J For Sci. 2019;7(2):187–204. https://doi.org/10.31195/ejejfs.603510 .

Zhou C, Pei T, Xu J, Ma T, Fan Z, Wang J. Urban dynamics and GIScience. In: Huang B, editor. Comprehensive geographic information systems. Oxford: Elsevier; 2018. p. 297–312.

Chapter   Google Scholar  

Zhuo Y, Jing X, Wang X, Li G, Xu Z, Chen Y, Wang X. The rise and fall of land use mix: review and prospects. Land. 2022;11(12):2198. https://doi.org/10.3390/land11122198 .

Zou L, Liu Y, Wang J, Yang Y, Wang Y. Land use conflict identification and sustainable development scenario simulation on China’s southeast coast. J Clean Prod. 2019;238: 117899.

Download references

All funding is done by Dr. Anila Kausar’s research Lab. The authors declare they have no financial interests.

Author information

Authors and affiliations.

Department of Geography, University of Karachi, P.O. Box 75270, Karachi, Pakistan

Anila Kausar, Salman Zubair, Hadeeqa Sohail & Fizza Ejaz

Department of Geography, University of Gujrat, Hafiz Hayat Campus, P.O. Box 50700, Gujrat, Pakistan

Muhammad Mushahid Anwar & Asad Aziz

Department of Occupational and Environmental Safety, National Technical University Kharkiv Polytechnic Institute, Kharkiv, Ukraine

Sergij Vambol

Department of Environmental Engineering and Geodesy, University of Life Sciences in Lublin, Lublin, Poland

Viola Vambol

Department of Applied Ecology and Nature Management, National University «Yuri Kondratyuk Poltava Polytechnic», Poltava, Ukraine

Interdisciplinary Research Center for Membranes and Water Security, King Fahd University of Petroleum and Minerals, 31261, Dhahran, Saudi Arabia

Nadeem A. Khan

Department of Fire Prevention and Life Safety of the Civilian Population, Institute of Public Administration and Research in Civil Protection, Kyiv, Ukraine

Serhii Poteriaiko & Vasyl Tyshchenko

Department of Electromagnetic Warfare, National Defence University of Ukraine, Kyiv, Ukraine

Rustam Murasov

Institute of Environmental Sciences, University of Karachi, Karachi, Pakistan

Owais Iqbal Khan

You can also search for this author in PubMed   Google Scholar

Contributions

“Conceptualization [AK], [MMA], [SV]; methodology [MMA], [AA], [VV]; software [AA], [MMA], [HS]; validation [HS], [AK], [AA]; formal analysis [NAK], [AA]; investigation [AA], [MMA]; resources [SZ]; data curation [SZ], [OIK], [FE], [RM]; writing original draft preparation [SP], [VT], [HS]; writing review and editing [VV], [HS], [SV]; visualization [HS], [VV]; supervision [MMA], [SV]; project administration [MMA]; funding acquisition [HS], [MMA]. All authors have read and agreed to the published version of the manuscript.”

Corresponding author

Correspondence to Viola Vambol .

Ethics declarations

Consent to participate.

Verbal informed consent was obtained prior to the interview.

Consent for publication

The participant has consented to the submission of the case report to the journal.

Competing interests

The authors declare that they do not have any competing interests.

Additional information

Publisher's note.

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/ .

Reprints and permissions

About this article

Kausar, A., Zubair, S., Sohail, H. et al. Evaluating the challenges and impacts of mixed-use neighborhoods on urban planning: an empirical study of a megacity, Karachi, Pakistan. Discov Sustain 5 , 24 (2024). https://doi.org/10.1007/s43621-024-00195-5

Download citation

Received : 09 September 2023

Accepted : 01 February 2024

Published : 07 March 2024

DOI : https://doi.org/10.1007/s43621-024-00195-5

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Environment
• Land-based surveying
• Land use classification
• Object-based analysis

Advertisement

• Find a journal
• Publish with us
• Track your research

The Future of Mixed-Use Developments: Innovations and Trends

Home » News » The Future of Mixed-Use Developments: Innovations and Trends

The Evolution of Mixed-Use Developments

Mixed-use developments have significantly evolved from their early incarnations. Initially, these developments were a response to the need for efficiency in urban spaces, often driven by the limited availability of land and the desire to reduce commute times. Over the years, mixed-use developments have become more than just a practical solution; they represent a shift towards a more integrated and holistic approach to urban living. This evolution reflects changes in societal values, with a growing emphasis on community, convenience, and accessibility. The section will further explore the transition from the post-war urban sprawl, characterized by distinct residential and commercial zones, to the contemporary approach that blends these elements seamlessly, fostering vibrant communities where people can live, work, and play in close proximity.

Emerging Trends in Mixed-Use Developments

Recent trends in mixed-use developments are not just about architectural innovations but also about responding to the changing lifestyles and preferences of urban dwellers. The concept of ‘placemaking’ has become central, focusing on creating spaces that promote social interaction and a sense of community. Developers are increasingly incorporating features like public plazas, open-air markets, and community event spaces to attract a diverse range of tenants and visitors. Another significant trend is the focus on sustainable and health-conscious living. This includes the creation of pedestrian-friendly zones, cycling paths, and the integration of fitness centers and green spaces within the development. Additionally, the rise of e-commerce and remote working models are prompting a rethink in the design of retail and office spaces, leading to more flexible and multi-functional environments.

Innovations in Design and Sustainability

The design and construction of mixed-use developments are increasingly driven by principles of sustainability and environmental responsibility. This involves not only the use of eco-friendly materials and energy-efficient systems but also a broader approach to sustainable living . Urban farming initiatives, for instance, are being integrated into these developments to promote local food production and reduce carbon footprints. Water conservation strategies, such as rainwater harvesting and gray water recycling, are becoming standard practices. Moreover, these developments are being designed to adapt to the changing climate, with features like heat-resistant materials and natural ventilation systems to mitigate the effects of urban heat islands. This section will explore how these sustainable practices are not just beneficial for the environment but also add long-term value to the properties, attracting a new generation of environmentally conscious tenants and buyers.

The Role of Technology in Mixed-Use Developments

The integration of technology in mixed-use developments is reshaping the real estate landscape . Smart building technologies are being employed to enhance energy efficiency and manage resources more effectively. This includes automated lighting and HVAC systems that adjust based on occupancy and usage patterns, as well as intelligent security systems that ensure safety while respecting privacy. The use of AI and machine learning is also transforming property management , from predictive maintenance to personalized services for residents and tenants. Furthermore, the adoption of digital platforms facilitates better communication and engagement within these communities, creating a more connected and responsive living environment. This section will delve into how these technological advancements are not only improving operational efficiency but also enhancing the quality of life for those who live and work in these spaces.

Community Engagement and Social Connectivity

The success of mixed-use developments increasingly depends on their ability to foster community engagement and social connectivity. This involves creating spaces that are not only functional but also emotionally engaging. Design elements like interactive public art, community gardens, and open spaces for events and social gatherings are becoming integral parts of these developments. Developers are also partnering with local artists, cultural organizations, and community groups to program events and activities that resonate with the local community. This section will examine successful case studies where mixed-use developments have become community landmarks and gathering places, contributing to the social fabric of the neighborhood.

The Future Outlook for Mixed-Use Developments

The future of mixed-use developments looks promising, with several emerging trends likely to shape their evolution. One significant trend is the increasing focus on resilience and adaptability, particularly in response to challenges like climate change and public health crises. This involves designing spaces that can adapt to various scenarios, from environmental disasters to shifts in the way we work and socialize. Another trend is the integration of advanced technologies like augmented reality and virtual reality, which can enhance the planning and development process, as well as the end-user experience. Additionally, there is a growing interest in developing mixed-use spaces that cater to specific demographic groups, such as developments centered around health and wellness for older adults or innovation hubs for tech startups. This section will explore these and other trends, offering insights into how mixed-use developments will continue to evolve and shape urban landscapes.

Schedule Your Consultation Today

Ready to turn your dream project into reality? Schedule a free consultation with our expert team today and let's start building together!

Get Started Now

Recent Posts

Real Estate Crowdfunding: A New Way to Invest Nationwide

March 24, 2024

Urban Gardening in Real Estate: Greening Cities Everywhere

March 18, 2024

March 8, 2024

The Role of Technology in Modern Real Estate Development

March 1, 2024

Compliance 1

Real Estate 18

Redevelopment 3

Technology 1

Join our Mailing List for News and Project Updates

Join our mailing list...

Email address

Start Your Project Today

Let’s discuss your vision for that next project and see how we can help you bring it to life.

• Hispanoamérica
• Work at ArchDaily
• Terms of Use
• Privacy Policy
• Cookie Policy

Mixed Use Architecture

Vertikal Nydalen / Snøhetta

Fa-brick / Society of Architecture

Seongsu Silo: Seoul Urban Manufacturing Hub / Society of Archi...

Ngói Space / H&P Architects

Arts District Warehouse / Sheft Farrace

The Cornerstone House / ROOM+ Design & Build

EGO building Mixed Use Building / owolarchitects

Silt Middelkerke / architectural studio ZJA + Bureau Bouwtechn...

C-PROJECT Commercial and Office Building / GAGAHOHO Architects

Tokyu Kabukicho Tower / Yuko Nagayama & Associates + KUME SEKK...

The N M Bodecker Foundation / Skylab Architecture

Chrome Company HQ Building / JYA-RCHITECTS

Industry Lanes Building / Architectus

Chonburi Multi-Purpose Building / SUPHASIDH

Vasat Vita Office and Residence / Vuumaatra Consultants

QO Apartments / Archetonic

KANAME NO MORI : Keystone Forest Commercial Building / Nori Ar...

Bagh GHushkhaneh Carpet Studio / SE-BÆR Studio

The Wessel Quarter / Vigsnæs+Kosberg++ Architects

Nantou Hybrid Building / URBANUS

The H Residence / Tariq Khayyat Design Partners - tkdp

Padvi The Verandah House / PMA madhushala

Living on the Graveyard / Marc Prosman Architecten

ARCHIVED MASS / AGIT STUDIO

• Planning Board

Study of Mixed-Use Development Trends

Study of Mixed-Use Development Trends documents

RFQ and scope of work

Staff report  

The Third Place – Mixed-use blog

Montgomery County Planning Department staff, along with the consulting firm HR&A Advisors, completed an analysis on mixed-use development trends in the county. The study looked at mixed-use development from 2010-2020, both on-the-ground development as well as approved projects in the Development Pipeline. Its primary goals were to understand the characteristics of mixed-use properties in different parts of the county, as well as what aspects of mixed-use are doing well, and, finally, to provide recommended improvements to Montgomery County policies to enhance mixed-use development.

Montgomery County is a large and diverse suburb of Washington, DC with a population of 1.05 million people. The County has dense urban central business districts like Bethesda and Silver Spring, large swathes of automobile-oriented suburbs built from the 1960’s to 1990’s, and a rural agricultural reserve that is 1/3 of the landmass of the County. Especially within the last ten years, mixing uses has become an increasingly central component of real estate development in Montgomery County as growth shifts from greenfield to infill.

Mixed-use may take many forms, including vertical mixed-use (multiple uses within a single building) and horizontal mixed-use (multiple uses in separate structures on a single property). Within Montgomery County, mixed-use constructed in the past 15 years is primarily vertical mixed-use with retail on the ground floor and office or residential above. For the purpose of this study, M-NCPPC is interested in vertical mixed-use within a single building.

Mixed-use development is steadily growing as a share of total development, with Pipeline projects even more weighted toward mixed-use than other types of recent development. Between 2010 and 2020, mixed-use development made up nearly 50 percent of new commercial and multi-family development delivered. Consistent with national trends, that mixed-use projects are becoming more common than single use, the Pipeline shows that split increasing, approaching 60 percent.

Mixed-use development is predominantly anchored by residential uses with ground floor retail as the secondary use. They are primarily located down-county and along the I-270 corridor. The scale is generally mid-rise in form, with high-rise buildings occurring most frequently in Bethesda and Silver Spring. To that point, the study notes that Rockville, Bethesda, Silver Spring, Gaithersburg, and North Bethesda make up 88% of total mixed-use square footage.

There are several drivers of success and failure regarding ground floor retail. For example, mixed-use near, or within, already vibrant areas, succeed better than not, or those situated on back-streets. Similarly, connectivity and costumer-attraction are made more difficult when near large, vacant areas and parking lots. Vacant storefront space also acts as a “negative amenity.”

Success factors

The study includes a section describing factors that contribute to successful mixed use development, including:

• Sustainability: Sustainability is both environmentally responsible but also can be seen as an amenity, often returning premium rents. Mixed-use projects can explore traditional methods of sustainability, such as LEED certification, as well as less traditional methods like green roofs, stormwater collection and recycling, or solar panel integration.
• Walkability: The ground floors of these projects can affect the larger pedestrian experience in a district. Most mixed-use projects rely on ground floor activation to create success for the commercial uses within the building, usually in the form of retail. These spaces should contribute to, and plug into, the pedestrian experience.
• Authenticity: The most successful mixed-use projects, especially in the case of mixed-use districts, should strive to either reinforce, or establish, the character, and feel, of a neighborhood. In smaller developments, authenticity can come by adding to the existing fabric of an area and aim to lease ground floor space to local retailers as opposed to national brand names, support and display local art, or host community and neighborhood events. In mixed-use districts, the authenticity of the project can be strengthened through the engagement of the local community throughout the planning process, ensuring the community’s vision and voices help to drive project design.
• Convenience: Mixed-use projects are most successful in areas proximate to transit. These areas tend to be more easily accessible to residents, workers, and shoppers of diverse incomes. Having a variety of retail, restaurants, and other amenities activate ground floor space.
• Flexibility: Zoning and regulations that can accommodate changes in consumer preferences and market conditions will result in more successful mixed-use projects. The Commercial/Residential zoning family (CR) allows for a wide-range of uses to respond to development trends and needs.
• Inclusion: Mixed-use projects should be designed for all people, both community members as well as visitors. Montgomery County’s inclusionary zoning policy is a good example of creating inclusion in mixed-use. Other methods include leasing retail space to smaller, local businesses and designing spaces to be welcoming to diverse users of all abilities.

Recommendations

The study includes recommendations based on the data analysis, policy analysis, and a review of case studies from comparable jurisdictions. The study notes that many other jurisdictions tend to rely on a combination of more frequent plan updates and site-specific approvals to accommodate shifts in developer demands or policy. It also recommends having a more discretionary review process, as is the case in Bellevue, WA, which has a mix of requirements and discretionary items in the review process, offering developers both certainty and flexibility when needed. Regarding high-priority design guidelines, Bellevue also has a mix of required and negotiable design guidelines, allowing the City to prioritize their guidelines and ensuring that developers comply with design preferences that are considered a top priority. Additionally, Fairfax County has Urban Design Guidelines that provide in-depth descriptions and options for what the County envisions for the Community Revitalization Districts.

The study demonstrates that mixed-use development is most successful in more urbanized places and, thus, provides recommendations prioritizing densification and increased flexibility for ground floor uses and activation strategies. Additionally, it recommends maintaining and increasing affordable housing.

Regarding the development process, the study recommends exploring the streamlining of the development approval process outside of the need for plan updates. This could be achieved through adjusting policies to balance flexibility with minimum requirements, exploring tweaks in the bonus density point system, and establishing policy and workflows focused on flexibility, in general.

Finally, concerning the mixed-use market in a post-Covid-19 environment, the study suggests short-term strategies such as “dressing up” vacant space, incorporating the use of public art, and allowing for altered uses of ground floor retail space for temporary child-care or co-working space, as well as rental assistance and/or small business grants to assist in continuing active ground floor spaces that will enable mixed-use development to be seen in the healthiest light.