This year’s Bisnow Annual Build to Rent Conference certainly had a buzz with the backdrop of Wembley Stadium and Quintain Build to Rent buildings; and the chance to catch up with friends old and new. The room was full of excitement for the future of the sector.
The keynote speakers portrayed a very positive outlook of the current and future market within the build to rent sector. This was re-enforced by many operators reporting they had collected 96% of market rents across major cities, and expectations of significant investment in the upcoming years of up to £5bn were predicted. Many were very encouraged of the recent appointment of a senior figure in the Conservative Government (Michael Gove) to the post of Housing Minister. Hopefully a sign of the importance housing will play for this government.
ESG (Environmental Social Governance) was a prominent feature in this year’s event. Many are looking at ways of making schemes green and reducing the carbon footprint. This was highlighted with reference to planning permission, with developers having to think very carefully about moving towards carbon neutral models. It was remarked that over 50% of carbon emissions are produced during the build phase within a 10-year operating cycle.
The Art of Transformation session addressed urban regeneration and change of use. Allan Lockhart, CEO at New River spoke positively about planners encouraging the re-generation of city centre retail assets in order to offer mixed use schemes to residents. It was interesting to note how different developers were struggling with the building structures, often finding that a more phased and long-term approach was better than a full refurbishment of a large retail asset. Key issues must also be looked at when re-purposing buildings such as fire safety legislation, which was not being considered by government and planners. Communication would need to improve in this area before planning was more easily gained and buildings could move forward.
“Value Add” for BTR was one of the most important trends for retaining residents. Tom Grey of David Phillips Furniture, the moderator of the session summed this up well: “After discussing the importance of technology, amenities and other add ons, it seems as if the panel agree that the most important part of retaining residents is customer service and how we measure this”. This was re-enforced by Grace Oyesoro, Operations Manager at Quintain Living who spoke passionately about her team delivering exceptional service and spoken about in depth by Harry Downes, Managing Director at Fizzy Living as their key reason for success.
Interesting comparisons were made throughout the day between the PBSA (Purpose Built Student Accommodation) market and the Build to Rent Market. It is agreed by most that BTR is set to follow a similar trajectory and similar trends to the PBSA market with it being the ‘go to’ investment vehicle for investors focusing on the alternatives market. Joe Persechino at Axa Investment commented that the Build to Rent market was still far away from gaining the necessary stability of rents and unit numbers before we see any key mergers or acquisitions of companies taking place. A very interesting point was also made that the student market had the stability of nominations agreements from universities to fall back on, which made investors feel more at ease about the long term viability of the sector.
If you didn’t get a chance to catch up with James Gregory and Hayley Mintern during the event, or you were unable to attend, they would be more than happy to share any sector insights.