{"id":39836,"date":"2021-08-23T05:08:20","date_gmt":"2021-08-23T09:08:20","guid":{"rendered":"https:\/\/www.mrisoftware.com\/uk\/?p=39836"},"modified":"2023-01-25T12:59:30","modified_gmt":"2023-01-25T16:59:30","slug":"managing-mixed-use-developments","status":"publish","type":"post","link":"https:\/\/www.mrisoftware.com\/uk\/blog\/managing-mixed-use-developments\/","title":{"rendered":"Managing Mixed-Use Developments"},"content":{"rendered":"<p><span data-contrast=\"auto\">In the property sector, we\u2019re seeing\u00a0more and more\u00a0mixed-use\u00a0schemes\u00a0and developments being planned and\u00a0implemented.\u00a0Projects like the\u00a0<a href=\"https:\/\/www.propertyweek.com\/news\/native-land-makes-fossil-fuel-free-pledge-at-25bn-bankside-yards-scheme\/5115491.article\">\u00a32.5bn Bankside Yards scheme<\/a>, which will include office, retail, hospitality, leisure, and residential properties, are leading the recent surge in mixed-use developments across the industry. In addition to this, retail to residential conversion continues to push on, with organisations like Hammerson seeking to replace traditional anchor tenants with clusters of residential units.\u00a0<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">These schemes provide excellent investment\u00a0opportunities. However,\u00a0the management of different\u00a0property types can be a complex and nuanced task,\u00a0requiring\u00a0the administration of\u00a0multiple types of leases, and can lead to organisations using multiple\u00a0management systems\u00a0to cover all of their requirements.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><strong>Managing a\u00a0Mixed-Use\u00a0Development\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">Different sorts of leases\u00a0require different capabilities from your management systems, meaning that as soon as you pivot towards mixed-use, the management of your development can become complex. For example:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Assured Shorthold Tenancy\u00a0(AST)<\/span><\/b><span data-contrast=\"auto\">\u00a0management\u00a0may require\u00a0a\u00a0residential rental\u00a0management system capable of handling\u00a0resident\u00a0finding,\u00a0tenancy\u00a0progression, internal unit maintenance\u00a0responsibilities\u00a0and landlord accounting.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Long leasehold\u00a0<\/span><\/b><span data-contrast=\"auto\">management\u00a0requiring operators\u00a0to\u00a0cater for ground rent billing, service charge\u00a0management and year end\u00a0reconciliation,\u00a0s20s and a myriad of compliance requirements.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">For\u00a0<\/span><b><span data-contrast=\"auto\">Commercial units,<\/span><\/b><span data-contrast=\"auto\">\u00a0leases may be of larger value, with more frequent and potentially costly rent reviews, along with the requirement to bill rent and service\u00a0charges.\u00a0\u00a0These leases may also have rent free periods, requiring the ability to\u00a0straight-line\u00a0for reporting purposes.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Retail units<\/span><\/b><span data-contrast=\"auto\">\u00a0can include more complex leases still, with either a\u00a0fixed rent or turnover based rent dependent on\u00a0sales\u00a0generated,\u00a0with\u00a0different\u00a0break points in sales and percentage rates\u00a0and\u00a0different\u00a0percentages\u00a0on\u00a0different\u00a0product sales.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">VAT\u00a0<\/span><\/b><span data-contrast=\"auto\">variations also need to be considered,\u00a0as mixed-use sites will often require a\u00a0reconciliation\u00a0of irreclaimable VAT at year end.\u00a0<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Finding a system to deal with mixed-use schemes can be challenging. Often, systems from a residential background can&#8217;t handle complex turnover rent, while agency specific systems are often not designed to handle service charges or the property to unit relationship hierarchy of commercial and retail properties. Vice-versa, systems designed for Commercial\/Retail management lack the ability to deal with some of the nuances of residential management such as ground rent and service charge notices, billing different charges on behalf of freeholders and RMCs or the tenancy progression functions for signing up ASTs. It is also not uncommon for commercial systems to be heavily property-centric and miss the emphasis on customer interactions that permeate through the residential space. <\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Because of this, it\u00a0doesn\u2019t surprise us\u00a0to find many businesses\u00a0using many different systems to manage mixed-use developments, which can lead to\u00a0several\u00a0issues:<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><strong>Fragmentation\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">Using multiple separate management systems to handle mixed-use developments can lead to a fragmented, siloed, opaque way of working,\u00a0resulting in\u00a0a lack of cohesion across the scheme and an inability to\u00a0access an overall view of\u00a0a scheme or portfolio\u2019s performance from everything to leasing,\u00a0maintenance,\u00a0finances,\u00a0or customer issues.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This can also cause a huge time inefficiency when reporting to clients or investors as data from disparate sources needs to be manually combined.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">In\u00a0both\u00a0cases, the use of\u00a0Integrated systems allows\u00a0for a more\u00a0rounded\u00a0approach,\u00a0the\u00a0joining up of teams and\u00a0the consolidation\u00a0of data\u00a0and\u00a0processes.\u00a0This also allows\u00a0senior level managers\u00a0access to a fuller picture of the\u00a0portfolio\u00a0as a\u00a0whole and\u00a0allows for more informed decision-making processes.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This also applies to the front-end challenges of a mixed-use development. With numerous different types of tenants, there is a danger of complicating the customer experience with different portals and apps geared towards commercial tenants, visitor management, and residential tenant aspects. Pushing towards a more joined-up approach to connect all tenants in a single configurable portal will allow you to foster a better community within the development and get maximum satisfaction for your customers and a better ROI from your tech.<\/span><\/p>\n<p><strong>Asset Management<\/strong><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Where majority leasehold developments are reasonably easy to model ground rent income for, the inclusion of commercial and retail or Build to Rent units introduces\u00a0rental income and owner expenditure that accentuates the need for\u00a0understanding the\u00a0potential\u00a0cashflows of a development.\u00a0<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">With\u00a0variance in\u00a0rents, breaks\u00a0and\u00a0lease lengths,\u00a0plus\u00a0fluctuations\u00a0in\u00a0turnover\u00a0rent,\u00a0operators need a way to effectively project the income\u00a0and model how this could change or be increased through effective asset management.\u00a0<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For a mixed-use\u00a0development,\u00a0a much more sophisticated toolset is required, with integrated asset and investment management solutions\u00a0that\u00a0can consume data from your\u00a0core property management solutions, allowing for\u00a0more\u00a0cohesive asset management strategy.<\/span><\/p>\n<p><strong>Lease Management<\/strong><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Another challenge for mixed-use operators includes onboarding more complex leases. It can be a step change to manage and understand the nuances and implications within different leases and agreements.<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Even more basic can be the\u00a0wasted\u00a0time taken searching through to paper-based\u00a0or PDF images of documentation relating to tenancies.\u00a0<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">AI extraction tools (like MRI\u2019s Contract Intelligence) can help with both pain points. Firstly, through using AI to abstract key data points from lease documents for data migration back to MRI property solutions. Secondly, for users who want to reduce time spent querying leases, our OCR can convert any document into instantly searchable machine-readable text, cutting down that time to mere seconds. This allows operators to free up time and better serve their customers.\u00a0<\/span><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n<p><i><span data-contrast=\"auto\">At MRI, <a href=\"https:\/\/www.mrisoftware.com\/uk\/products\/property-management-software\/\">our property\u00a0management\u00a0solutions<\/a> are developed with\u00a0an open and connected ethos,\u00a0meaning\u00a0our systems are fully\u00a0integrated\u00a0and are designed to make the management of mixed-use\u00a0developments simpler. Get in touch with our team today to find out how we can best serve your next project.<\/span><\/i><span data-ccp-props=\"{\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the property sector, we\u2019re seeing\u00a0more and more\u00a0mixed-use\u00a0schemes\u00a0and developments being planned and\u00a0implemented.\u00a0Projects like the\u00a0\u00a32.5bn Bankside Yards scheme, which will include office, retail, hospitality, leisure, and residential properties, &hellip;<\/p>\n","protected":false},"author":110,"featured_media":40046,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-39836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"contentshake_article_id":"","_links":{"self":[{"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/posts\/39836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/users\/110"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/comments?post=39836"}],"version-history":[{"count":0,"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/posts\/39836\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/media\/40046"}],"wp:attachment":[{"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/media?parent=39836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/categories?post=39836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mrisoftware.com\/uk\/wp-json\/wp\/v2\/tags?post=39836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}