Mixed-use development, usually a planned combination of hotels, retail, office or residential space, is a fairly widespread concept globally with several such iconic projects around the world. In the last decade or so, the concept has been gaining ground in India as well, though the combination (two or more elements) of retail, office, and residential spaces have been more popular. However, as investors look to maximize returns through efficient land usage and optimal utilization of FSI, hotels have also been added to the mix. 
 
Mixed-use projects leverage the best of each asset class, while diversifying the risks
From the investor’s standpoint, a mixed-use project is a financially sound proposition as it diversifies their income streams by eliminating the dependency on one asset class. Moreover, land availability at prime locations is a challenge in India and the FSI is also relatively low, resulting in high land costs that often make hotel projects unviable. This is where the element of mixed-use can makes a difference as it can help improve the viability of a project by maximizing land-use efficiency and utilizing FSI optimally. For instance, a developer can utilize the complete FSI of a plot by developing a mall on lower floors along with a hotel on the upper floors as retail is usually limited to 2-3 floors. Hence, these projects provide better returns to investors, cushioning the high land cost and bringing down the break-even especially in smaller cities.
 
Mixed-use developments are expected to become even more popular going forward, as an increasing number of people desire walkable neighbourhoods where they can live, work and play, especially in a country like India where good public & social infrastructure is still inadequate.