UK Build to Rent needs to scale up fast
How can we make Build to Rent (BTR) reach its potential for real estate investors, and how do we unlock the barriers to secure investment?
Nigel Howell, Chief Executive of FirstPort
The answer largely focuses around the three Ps – Product, Pace and Partnership.
Product – There is a lack of institutional grade product on the scale required by investors. Developers, designers, contractors and those in the property management industry have a responsibility to boost supply without compromising the quality of the product. Profitable assets rely on high occupancy, healthy rents and low churn. As such, ‘customer experience’ is as important as ‘customer service’ and packages of amenities, services and a community environment have become unique selling points for the new generation of BTR assets in the UK.
Pace – While the pipeline is substantial, relatively few schemes are built and operating. A greater number of profitable assets needs to be delivered which offer strong, reliable yields and manage both commercial and reputational risk, at greater speed and in more locations across the UK. Without such a change in pace, the market will lack the maturity to move towards secondary sales, an important waypoint for a robust asset class which can continue to attract investment.
Partnership - Investors need partners who can do the whole myriad of BTR activities to a high standard and at scale. While there is no shortage of new consumer brands, some operators lack the capacity and resources to deliver multiple schemes in multiple locations, while ensuring consistent operations. The industry needs to step up and learn lessons from its peers - observing other markets and encouraging peer-to-peer cooperation will help to create a robust asset class and to continue to attract both domestic and foreign investment.
You can read the full article, which was published in EuroProperty here.