Business management & development

Left to right: Russell Kett, chairman of HVS; Marloes Knippenberg, CEO of Kerten Hospitality; and Dexter Moren, founder of Dexter Moren Associates.

“Often a MUD is a building with retail on one

floor, then a couple of floors of office space and then residential space above it,” he adds. “That does technically constitute a MUD, but there is no hotel element. Now, the design is entirely market- driven and the hotel is always part of it, but we take a blank sheet of paper and look at a whole range of possibilities.”

Where there is sufficient land, a golf course might be part of the plan. Alternatively, other real estate components could be added to improve a project’s financial viability. For instance, new apartments could be built for sale to private owners, who may rent them out as part of the site’s property pool. Retail, offices, meetings and conference facilities might also be part of the plan, alongside leisure and hospitality offerings. “Serviced apartments, long-stay accommodation and branded residences are also included in the mix, so we now see multi-hospitality buildings with hostels, hotels and apart-hotels and even brands where all three are provided,” says Kett. “I can’t think of any location where a combination of demand from hostel to different levels of hotel to long-stay is not appropriate.” A mix of accommodation, workspaces and leisure facilities cushions the high-end costs of development and potentially provides better returns with the blend of short-term and long-term income streams diversifying the risk to revenue. What’s more, complementary asset classes within a development can act as catalysts for each other, further strengthening the revenue stream.

Green MUD

When designed well, MUDs comprise elements that complement each other and drive revenue generation, in part by being connected to the local communities beyond their walls. Similarly, the convergence of complementary elements enables a holistic view of sustainability within a large development – a key concern for communities, guests, residents and investors alike.


It’s a line of thinking that fits neatly with a post- pandemic focus that will likely turn from Covid regulations and vaccine disposal to long-term climate change solutions.

“The future is focused on sustainability and reducing carbon waste, so in all instances the first approach is – and should be – how to repurpose existing real estate,” says Moren. “That is today’s creative challenge for architects and interior designers, and some of the most exciting projects are ones where extraordinary spaces are re-imagined.”

“From an ESG perspective, everything being built must have sustainability at its heart,” adds Kett. “Some investors won’t touch it unless the development addresses green issues. From the perspective of a sustainable business model, the ability to adapt is essential and developers have to think about how buildings can be repurposed over time.”

As the hospitality sector looks at how to recover from Covid-19, the appeal of sustainable, mixed-use developments with built-in characteristics that mitigate risk will no doubt catch the eye of investors. As the pandemic drives people to work and study at home more than ever before, MUDs become a natural solution to a growing demand for versatile spaces that can be sold as an ideal way to combine living and working in one place. “Pre- and post-Covid, we’ve seen a massive decline in high street retail, as well as a possible long-term reduction in office demand,” says Moren. “The future use of empty retail space will definitely be a MUD if it’s not an Amazon depot. Co-working and co-living models are replacing traditional, boring single-use buildings with a focus on mixed use.”

MUDs could be fertile ground on which both local communities and the hospitality industry plant the seeds of recovery. In an industry accustomed to evolution, the turn towards mixed-use hospitality spaces is a trend that’s been knocking on the door for some time. ●

Hotel Management International /

HVS; Kerten Hospitality; Dexter Moren Associates

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