Research article

Higher Education: Mixing uses and blurring spaces

Higher education should be at the centre of the modern mixed-use environment

Commercial property developers and urban regeneration specialists have fully embraced the idea of mixing uses, blurring space and placemaking over the last decade, for a variety of reasons. More recently major housing providers such as Urban & Civic have also acknowledged the relatively simple idea that a mono-cultural environment is unattractive to its users.

Spending an extra 50% on placemaking can increase land values by 25%

Savills Spotlight on The Value of Placemaking, 2017

Of course, just making an attractive place does not necessarily pay off. Indeed for a long time spending on soft non-income generating uses was seen as hard to justify and only the domain of the public sector. However, the statistics show that an ever increasing number of developments are ticking the mixed-use box, with Savills research in 2017 showing that the majority of larger developments planned across the UK were mixed-use.

We have identified three themes driving this rise:

Projects are getting bigger:

As developers and investors get larger, so do the projects that they need to deliver to add value to their investors or shareholders’ interests. However, few locations can support large single-use developments, so mixing uses reduces letting and sales risks. Also, a mixed-use development plan often allows a developer to flex or phase the delivery to fit the market cycle.

People prefer mixed-use environments:

While this might seem blindingly obvious, it has taken the real estate industry a long time to accept the fact that mixed-use areas are more interesting than single-use. Whether we compare the historic British market town with the sterile US shopping mall, or the 1980s campus-style business park with the Kings Cross development in London, we can see that occupiers, visitors and local residents all prefer a mixed-use environment. This not only makes delivering the project easier, but also enhances the investment performance by bolstering user experience and hence spend. More recently the debate has also swung towards whether mixed-use environments are better for wellbeing, particularly where either the size of the project or the mix of uses allows the inclusion of health and/or education facilities.

Figure 1

Mixed-use and ‘alternatives’ investment in the UK has more than quadrupled over the last decade, and now accounts for 30% of total property investment
Source: Savills Research, Property Data

Investors have become increasingly comfortable with mixed-use projects:

Twenty years ago developers and owners were more biased towards single-use projects and assets as they were perceived as simpler and more saleable. However, as the chart below shows, investment in mixed-use assets or portfolios in the UK has quadrupled over the last 10 years.

Implications for higher education

So, where does education fit into the mixed-use question? The simple answer is right at the centre. Many cities around the country and indeed the world grew up around their educational institutions, with the mix of uses starting as planned and then growing organically. However, the global real estate community has only recently rediscovered the joys of an educational anchor, whether it be a primary or secondary school as part of a major residential-led scheme, or the University of the Arts at the heart of King’s Cross.

Not only do schools or higher education institutions provide an immediate draw to the development, but they also increase footfall and dwell time across the day. This makes the project feel more alive and exciting than a single use residential or office scheme.

Another advantage of delivering a mixed-use environment is that it delivers the ability to co-use facilities and services that might not have been viable in a single-use location. Whether this be a health centre, a playing field, a library or just intellectual capital, there are few businesses or residents – or indeed universities – who would not value more of it.

This then swings us towards the wider topics of the sharing economy, shared space and porous campuses. Perhaps one of the biggest ironies of this debate is that many developers around the world have copied the openness and mixed-use nature of university towns, while the universities themselves have become more inward facing and siloed.

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