Mixed developments are becoming a highlight for future land use where URA blue sites can have residential component. Offices, retail and even hotel can become part of the mega development. There are a few notable ones like Duo, South Beach, Tanjong Pagar Centre being 4 in 1. There are few 3-in-1s (PLQ, Marina One) and 2-in-1s are becoming increasingly common. We will see more of them in the coming years as land use intensifies.
There is a component that is often hidden during launch which is the management fee calculation. Having signed both Duo (2013) and PPR (yesterday), I can't help but noticed how this factor is calculated. I hope to shed some light for future investors looking at Mixed Developments even for 2-in1.
Residents have to pay for both residential and shared spaces. Shared spaces can be pretty vast depending on the overall development size. Residents have to ask for share component of both residential (pool, carpark, security etc) and shared spaces (commercial/public accessed component) which can add up to a bigger sum. This factor eats into overall yield.
Calculations that I personally witnessed:
Park Place Resident Total Management fee: Unit Share/Total Residential Size + Unit Share/Total Shared Space <itemised>
Duo Residence Total Management fee: Unit Share/ (Total Residential Size + Shared Space) <one overall figure only>
My point is for investors who are looking at mixed developments in the future, do take note of this shared space calculation as a total. The bigger the mixed development, the larger the shared space. Agents and developers might not have fully explained this to you.
2 Cents,
PropVestor