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News Article

Mixed-Use: Social, Responsible and Sustainable Infrastructure

Wed, 11/15/2017 - 17:23

Mexico’s commercial real estate boom its boosting the economy, but to ensure sustainable growth developers and the public sector must work closely together to foster the development of cities, panelists told the audience at the Mexico Infrastructure & Sustainability Summit 2017 held at the Sheraton Maria Isabel in Mexico City on Wednesday. Mixed-use projects reduce risk by combining shopping malls, offices and residential buildings in one place while meeting a social demand for an integrated real estate.

The industry leaders addressing the issue – Juan Bernardo García, Partner, Chair Real Estate Latin America at Baker McKenzie; Agustín Sarazola, Director General Mayakoba at OHL Desarrollos; Eduardo Orozco, Managing Director Latin America of Greystar; Jimmy Arakanji, Co-Founder and Co-CEO of Thor Urbana; and Javier Lomelín, CEO Latinoamérica at Colliers International – agreed on a key factor: real estate developments should ultimately pursue the goal of making people happier by fulfilling a need for certain services that will improve life quality. In this scenario, the role of real estate developers must aim to meet this demand in a responsible and sustainable way. Sarazola framed the debate in the experience of his company. “We know how important the construction of infrastructure really is in the development of a zone. Infrastructure is absolutely critical for people to be happy but also for businesses to thrive,” he said.

He shared the example of the development of Playa del Carmen, which significantly grew during the 1990s due to high tourism demand. This created a need for infrastructure to serve the people who came to fill the ensuing jobs. The developers of the area had to take into account the conditions in which workers lived, which led to the creation of the concept “cities for tourism and tourism for cities,” that is mainly “about offering tourism supply by creating the infrastructure for the workers to provide their services in a comfortable and happy way and with access to the resources they need,” Sarazola said, while speaking about the Mayakoba project that was a pioneer in this concept.

In providing infrastructure, it is also vital for developers to help the community in which they work to grow, Orozco said. “We believe we contribute to the zones in which we build by developing a product that puts homes in areas that are underused at the time.”

To accomplish this, Thor Urbana’s Arakanji stressed that it is fundamental for developers to focus on creating a sustainable development. “From the point of view of a developer, when we find opportunities in different parts of the country, we seek to collaborate with other developers, for example on mixed-use projects.” The goal is to complement the project with specialized developers in each sector. “What we seek is alliances,” he said.

Mixed-use developments appeared as an alternative to meet multiple demands, but they are not new. “We must remember that long ago residential buildings used to have some commercial spaces,” Lomelín said. Today, these projects not only satisfy the residential and commercial demand of users, but they also benefit developers. “Unquestionably, today, given land prices, we face the need to maximize the value of land and to balance the risks,” Lomelín added.

Perhaps one of the most important factors is the benefit these developments have on the quality of life. “To be able to have in one space multiple demand satisfiers offers the possibility of having more benefits without the need to move,” Lomelín said. This serves developers but also the residents of the area, given that they don’t necessarily have to commute to get access to the services provided in their mixed-use development.

The leaders, that according to the moderator Juan Bernardo García “come from companies with similar foreign backgrounds, which allows us to share a common perspective while engaging in discussion;” also agreed on the increasing need for developers to work collaboratively and to have effective communication. “We are working to develop infrastructure for the future, which I believe will increasingly imply collaborative work between developers,” said Orozco. Arakanji agreed: “I believe that communication is increasingly important; we should join forces instead of competing against each other. This will lead to responsible and sustainable developments,” he said.