A panel discussion at the recent ULI Europe Real Estate Forum in Dublin examined how investors are driving demand for and managing mixed-use districts and buildings. Speakers said that rather than many small and varied projects, they have concentrated on fewer and larger high-return projects.

Paul van Stiphout, a senior portfolio manager of real estate in the Amsterdam office of APG Asset Management (APG), set out how APG’s strategy has evolved since the global financial crisis. “It was the case that we had a myriad of investments—lots of smaller developments—but during the crisis we changed our portfolio to concentrate on fewer, large investments,” van Stiphout told delegates. “Coming out of the crisis, we noted how certain locations and asset classes were doing better or worse. We had a field day buying assets. We’re not constrained by sectors—we take a mixed-use approach to investment. We’re city-driven rather than country-driven.”

To illustrate his point, van Stiphout pointed to APG’s investment in London’s East Village, the former Athletes Village adjacent to the Olympic Park in Stratford, which was the United Kingdom’s first dedicated build-to-rent (BTR) development at scale. He said that APG had been attracted to the project due to the investment made in the area as a result of the Olympics, as well as other infrastructure improvements and the construction of the Westfield shopping center.

The East Village homes are rented out under the Get Living brand, which van Stiphout said was being used to further develop the BTR portfolio, in partnership with developer Delancey. “We’re rolling it out,” he said. “Today, the partners are looking at building further residential on top of the shopping center.”

Van Stiphout also described the strategy behind APG’s decision in 2016 to acquire a 75 percent stake in the redevelopment of the St. James shopping center in Edinburgh. The existing center, he said, was a “monstrosity of concrete” and something of an anomaly in a city as beautiful as Edinburgh.

APG was aware of the project from its inception but decided to sit tight until it was clear that it would go ahead following delays due to the 2008 crash. “We came in just before development began,” said van Stiphout. “We’ve already seen that the investment has loosened up other investments in the area.”

The panel’s second speaker, Rachel Miller, head of strategy at Grosvenor Britain & Ireland, required no lessons on the value of mixed-use development and of placemaking. After all, her employer has been deploying broadly the same strategy for 300 years with its Mayfair and Belgravia estates in central London.

“Placemaking is the buzzword of the moment,” said Miller. “People sometimes think that it is something fluffy or vague, not something fundamental. Or maybe they think it’s part of CSR [corporate social responsibility], but not a core part of the business model. Well, it is for Grosvenor.”

However, Miller added that the way in which Grosvenor approached placemaking had evolved. For instance, she said that historically the Mayfair estate was surrounded by major roads that acted as a barrier between it and other parts of the city, something that was quite deliberate. Today, on the other hand, the strategy is to create links with other neighborhoods. “We want our estate to be more integrated into other areas,” Miller said. “It was developed to be exclusive and we want to reverse that.”

Over the next ten years, Miller told delegates, Grosvenor will spend £1 billion (US$1.3 billion) on its estates, including on creating new links and improving the public realm, and is seeking to measure the value of its estates not just in terms of financial returns but also including factors such as environmental sustainability and placemaking. “We need to look at financial returns as well as social impact if we’re to be sustainable,” she said.

The final speaker, John Mulcahy, chairman of the Irish Property Unit Trust, picked up on the point that, at the end of the day, investors have to concentrate on financial returns. “We only invest in places where we will make a good return,” he said, adding that investing in placemaking can be justified only if it leads to better returns down the line. “We know placemaking is a good thing, but we need a measure and we don’t have one at the moment. We need a measure to persuade investors.”

This, Mulcahy urged, is the only responsible strategy to pursue when one is dealing with other people’s money. “If you’ve taken people’s pension, you have to be responsible,” he said. “You can’t indulge in your own view of social responsibility. But you can be enlightened—public realm works in the long term, but it is very difficult to measure.”

Mulcahy was also skeptical about some of the assumptions made by other investors, particularly those who target millennials when countries across the Western world have aging populations. “I hear a lot about creating places for young people, but 50 percent of the population isn’t young, so who are we building for?” he asked. “The vision needs to be clear. My argument is that there needs to be more intellectual vigor about where we are investing and why.”