The added value of mixed-use: An exploratory study into the added value of mixed-use real estate development in the Netherlands

Due to the changing role of the private sector in the Dutch land development process, real estate developers are increasingly involved in realising the interests of the direct surroundings of their redevelopment projects. To incorporate the seemingly unprofitable space-use in their project, developers increasingly opt for mixed-use real estate. The chosen mix of space-uses directly impacts the business case and the area. However, the relationship between these two is unclear, leading to the formulation of the research question: How can mixed-use generate value for both the area and the redevelopment business case? The aim of this research is to make explicit the mutual value generated by the mix of space-uses in redevelopment projects. It attempts to fill this knowledge gap through analysis of literature, exploratory interviews with field experts, and an embedded multiple case study. The non-holistic case study method consists of the individual descriptive analyses of three cases, among which two phenomena are studied as units of comparison: added value to the area; and added value to the business case. These phenomena are substantiated through literature and compared among the cases through a cross-case analysis. The exploratory interviews provide context for the interpretation of case results. The study identifies several benefits of mixed-use and the incorporation of particular space-uses. However, many of the benefits for the area do not end up with their investor. Moreover, assessing the extent of the benefits is difficult as they cannot be measured quantitatively, and stakeholders interpret their value differently. Additionally, mixed-use real estate falls outside of the asset classes of investors, and investor attitude towards the product type varies due to identified risks, but benefits in return are not assessed appropriately. By broadening the business case alternative value streams can be included using which the business case profits from the additional space-uses. Meaning qualitative benefits are also considered. The benefits from mixed-use can be categorised in primary, secondary and even tertiary value streams. The first of which is the direct impact of the additional urban function through compensation of the investment costs. The secondary value stream is based on the indirect value added through synergies between urban functions, increased marketability of the primary space-uses, and loosened project constraints. Furthermore, the study finds that some of the benefits for the developing party actually lie outside of the business case, thereby providing a tertiary value stream of positive exposure of the firm and strengthened relationships with public parties. What results is a comprehensive understanding of the mutual character of benefits that result from incorporation of a mix of space-uses in real estate objects. Their opportunity to generate value is not mutually exclusive to either the area or the business case, as project value is based on the vibrancy of the area it is situated in. Architecture, Urbanism and Building Sciences | Management in the Built Environmen