How Tall Buildings Feature in the Build-to-Rent Sector
2/12/24
The build-to-rent sector has great growth potential, especially as a leader of the net-zero agenda – with high-density living, co-living and affordable housing emerging as important trends.
By providing a long-term approach, the build-to-rent model can take strategic design interventions early in the process to ensure long-term sustainability and operational efficiency.
The sector is driven by institutional investment, focusing on scale and residential tall buildings, especially in urban areas, as Brendan Geraghty, CEO of Association for Rental Living, explains.
Brendan describes build-to-rent as a maturing sector with vast opportunities, driven by long-term investment strategies, sustainability goals and a focus on delivering an exceptional customer experience.
Development of the Build-to-Rent Market
Build-to-rent is a growth industry. It is backed by institutional investors – it is about scale and about tall buildings. But it is only about housing, so any of the tall residential developments that you see around the country are likely to be build-to-rent schemes.
It has many benefits in terms of how the sector is approaching the market and positioning itself. The market has a lot of pressure to green up their assets and to make sure they are sustainable over time. There are a lot of really positive dynamics in the build-to-rent market and I think we will be leaders in the pursuit of the net-zero agenda within the residential sector.
Urban build-to-rent is the biggest by far, followed by single family housing. Co-living is on the up, that is going to be high density with reasonably tall buildings. Later living and affordable will be new markets in the build-to-rent space.
How Developers are Viewing and Influencing the Market
The asset is owned ultimately by the institutional markets. They are looking at a 30-year hold, so they will do the repairs, refinancing and bits and pieces to get their assets to increase in value.
But what is really important to them is that they hold it for 30 years. And what that is doing within the dynamics of development is that they have realised that the 'for sale' approach, has not given them a product that really works in the longer term.
So we are seeing investors now making key supply chain strategic design interventions in the development brief, so that the asset is closer to getting it right first time. The predictable cost of living for management and operations is not going to cause them problems in the longer term. They do take a much more long-term view.
Boosting the Resident Experience
One of the key criteria of build-to-rent is around customer-centricity. That is where the rent revenue comes, and if you look after your residents, they will look after you.
The customer experience in build-to-rent starts with the kerb appeal or the need for a place to live, and then you really start the journey from there.
It is no different in residential spaces, we just have not had the choices before and that is starting to emerge in the build-to-rent sector.
Follow Brendan on LinkedIn: www.linkedin.com/in/brendangeraghty