Sites and buildings
Mixed-use and commercial redevelopment. Which uses, in what order?
Many redevelopment sites end up mixed-use, because the council wants commercial space kept, because the ground floor will not work as homes, or because combining uses makes the most of the site. Mixed-use schemes are harder to get right: each use has different buyers, values, design and servicing needs, and the commercial space is often worth less than it costs to build. The mix has to be tested on the numbers, not just the drawings.
Who it is for
For owners of commercial and town centre sites, developers planning mixed-use schemes, and investors buying or funding them.
What to consider
- Which usesWhat the council requires, what the market will support, and which uses add value rather than cost. Ground floor commercial space often earns little and can sit empty.
- Design and servicingSeparate entrances, cores and refuse for each use, deliveries and servicing, and noise and ventilation between them.
- Homes next to other usesNew homes beside pubs, music venues, workshops or industry must be designed so that the existing use can carry on.
- Tax and structureVAT treats new homes and commercial space differently, which affects recovery on build costs and how the scheme is structured; your tax adviser should confirm the position.
- Phasing and exitWhether to sell the homes and commercial space separately, hold the commercial space as an investment, or sell the whole scheme, and in what order to build.
The options
- Mostly residentialHomes with a small amount of commercial space to meet policy.
- Balanced mixHomes with a significant commercial element, valued and sold separately.
- Commercial-ledWorkspace, retail or leisure, with homes as a smaller part.
- Sell with planningSecure the consent and sell to a developer.
How we help
- Feasibility studies: what the site or building could become, and what each option costs and returns
- Site identification: finding and securing the right site
- Development management: managing the scheme, including the planning process and the right planning consultant
- Delivery strategy for complex sites
- Project management
Case studies
Guides
Common questions
Do I have to include commercial space?
Often the council will require it, particularly in town centres or where commercial space is being lost. The amount and type can usually be discussed.
How do I value the commercial part?
On the rent it would achieve and the yield an investor would pay, which is often well below its build cost. The appraisal should treat it separately from the homes.
Can you help with larger mixed-use schemes?
Yes. Our delivery strategy service covers phasing, logistics and cash flow on large and complex schemes.