Synergy Pays Off: Why Mixed-Use Developments are Defying the Property Downturn
New data reveals that integrated projects are outperforming standalone buildings, with ‘built-in’ customer bases driving take-up rates above 80%
- Mixed-use developments are outperforming standalone properties due to a "synergistic ecosystem" where office, retail, and residential components create a built-in customer base for one another.
- These integrated projects demonstrate superior performance with an average take-up rate of 81%, significantly higher than standalone competitors, especially in the office sector (81% vs. 72% occupancy).
- The trend is driven by a "flight to quality," as tenants and buyers are drawn to modern, sustainable (LEED/ESG), high-specification buildings that offer a seamless blend of work, life, and amenities.
- The success of this model is considered a fundamental shift in investment strategy, allowing developers to reduce risk and increase liquidity by diversifying asset types within a single prime location.
New data reveals that integrated projects are outperforming standalone buildings, with ‘built-in’ customer bases driving take-up rates above 80%.
As the broader economy faces a period of cooling, one sector of the property market is proving remarkably resilient.
Mixed-use developments—projects that combine offices, retail, and luxury living—are significantly outperforming traditional standalone buildings in both sales and occupancy.
Reporting for Krungthep Turakij, Bussakorn Phoosae highlights new findings from the Real Estate Information Centre (REIC) that suggest the "all-in-one" model has become the ultimate hedge against economic volatility.
According to Sitthipen Sittatpong, acting assistant director of the REIC, the success of these massive projects is down to a "synergistic ecosystem."
In a mixed-use environment, the various components feed one another: office workers provide a daytime customer base for retail outlets, while residents in the on-site condominiums support restaurants and services in the evenings.
This internal cycle of demand has pushed the average take-up rate for mixed-use projects to a robust 81%, leaving standalone competitors trailing.
Offices: A Flight to Quality
The contrast is most visible in the office sector. While standalone office blocks struggle with a 72% occupancy rate, offices integrated into mixed-use hubs enjoy 81% occupancy.
The report notes a distinct "flight to quality," where tenants are willing to pay a premium for buildings that meet LEED or ESG (Environmental, Social, and Governance) standards.
These modern, "Green" Grade-A buildings in prime locations are successfully raising rents, while older, unupgraded blocks in secondary areas are being forced to compete on price.
Residential and Retail Strength
The data also paints a bullish picture for other segments within the mixed-use umbrella:
Condominiums: These are the star performers, with a 88% sales rate. Demand is being driven by foreign investors and a younger generation of Thais who prioritise living near mass-transit links and lifestyle amenities.
Retail: Occupancy stands at 82%, particularly in "prime" zones and high-density communities where footfall remains consistent despite the economic climate.
Hospitality: While hotels currently lag with a 65% occupancy rate, they are tipped for a sharp recovery as international tourism, specifically from China and wider Asia, continues to rebound.
A New Strategic Standard
The REIC concludes that the dominance of mixed-use is more than a passing fad; it is a fundamental shift in investment strategy. By diversifying asset types within a single "Golden Location," developers are successfully reducing risk and increasing liquidity.
"The growth we are seeing this year reflects a deep confidence amongst investors," says Sitthipen. For the modern developer, the formula for success is now clear: high-specification, sustainable buildings that offer a seamless blend of work, life, and play.
