It’s a sad fact that beautiful buildings are not always the best performing, especially when we are looking at Build to Rent (BTR).
While design is important in attracting customers we should build from the operational side first, and then add design in later. This is how they build in the multifamily housing sector in the United States.
For build to rent the practicality of how a building runs defines whether a building will ‘stack up’ from an investment point of view.
While we should be excited about the role BTR can play in shifting people’s perceptions of renting, as far as driving yield is concerned, it’s the little things that will make the biggest difference.
The more practical it is, the less spent on maintenance. That lowers costs and increases customer satisfaction.
Small but significant operational costs will add up and make a big impact.
For example, square skirting boards are dust traps. But if you install smooth edges they do not trap dust, so cleaning time and thus cost is reduced.
The same can apply to light bulbs. Spending more on a longer-lasting bulb, which reduces replacement costs and wear-and-tear, adds up to a huge difference across a portfolio of properties.
Hundreds of incremental changes like that means your capital outlay over a period of time is less.
In the USA, they build from an operational view first, and then add the design in. For example, some hotels in the States use oil-based paint for the corridors that has a dotty pattern. So if a wall gets scuffed, instead of having to repaint the entire wall, they just have to touch the affected area up.
It is called ‘life cycle costing’.
The other side of operations is branding.
You only have to look at the market place developing in the Build to Rent sector to see that it will be highly competitive in years to come.
Hence why we need to start to start developing brands and setting out uniform standards now that will govern developments and operations.
People like brands because they are benchmarks. If you buy a Mercedes or stay in a Hilton Hotel, you know what you’re getting. This is especially important as we’re moving into a sector like the PRS that has traditionally been associated with low standards and poor service.
Design is great – who doesn’t love a beautiful building? But so should a building be a pleasure to live in and dream to operate. It’s not a case of one or the other.