with Ringley Group, Assael Architecture & Apache Capital Partners
Build-to-rent (BTR) as a sector has gone from pipeline to online, with the number of completed BTR homes now standing at over 43,000 according to the latest research from the British Property Federation and Savills.
While many initial BTR schemes were often converted for-sale developments, a new generation of BTR developments is arriving that have been designed from the ground up purely for rent.
For the investors backing the sector, the key metric in judging an asset’s performance is the net operating income (NOI) – or in other words, the rent collected minus the costs of running a building.
To discuss to what extent the design of BTR schemes can make operations more efficient, and in turn, boost NOI, Blackstock Consulting brought together Assael Architecture co-founder Russell Pedley, Ringley Group managing director Mary-Anne Bowring, who has advised a number of BTR entrants, and Jamie Snary, asset management director at Apache Capital Partners, which is delivering 7,500 BTR homes across the UK with Moda Living.
Pedley, whose clients include Legal & General and Grainger plc, kicked off the discussion on the need to balance “designing from the inside out” with “designing from the outside in”. He stressed the importance of understanding the residents’ journey, and thinking about how the building will interact with the local community beyond the front door.
Bowring argued that thinking about how the building will be used needs to be factored into its design right from the very start. BTR is unique, she said, because you are thinking about how to service the building in order to keep rent levels up while minimising maintenance costs. Pedley agreed, saying architects, investors and operators need to ensure the ‘back of house’ is just as well planned as the ‘front of house’.
Snary, whose track record includes asset managing market-leading student housing schemes in London and Cambridge, said his experience in purpose-built student accommodation taught him the importance of understanding what residents want. “If you don’t design it with residents in mind from the start, your asset value is not going to be the same as a purpose-built scheme,” he said.
Bowring then went on to emphasise how effective operations can help build genuine communities within buildings and in turn support resident retention rates. “Staff should be out there meeting and greeting” rather than working on admin, she said, highlighting that embracing technology can play a key role in freeing their time up.
Ringley has invested over £2m in creating a range of tech platforms for the residential market, including PlanetRent, which automates key parts of the lettings process, and Busy Living, which helps asset owners better monetise spaces within their buildings.
Snary finished by underlining the impact that well designed amenities and communal areas can have on the performance of a BTR asset through accelerated lease up and occupancy rates. With a “knockout community space,” he said, “you sell yourself without doing any marketing.”
Asset Management Director
Apache Capital Partners