The elephants in the Build to Rent room
Does placemaking hold the key to enhanced returns?
Stock and building a public realm – 5 insights in 3 minutes
Let's talk about stock. When you're acquiring new sights, what are you and other Build to Rent operators looking for?
We at Get Living tend to look for the bigger sites. We have a preference to get at least 400 homes in any one location, and that means we've really got to get urban sites that tend to be 5 acres or more. So we're going for a much bigger scale, because it delivers that public realm that, as I say, is axiomatic to our proposition. But you know after that we're looking for somewhere which has got great public transport. We're looking for somewhere that has got pretty close proximity to the big employers, because they employ the people that are typically the target audience that we're trying to provide homes for. An environment where in planning terms and economic development terms, it's fairly benign, because you know we're making a very big investment - as I say £150 million pounds plus. But actually in terms of just trying to get the planning consent you can be investing £3-4 million pounds in fees before you're really even in business.
What do you think is the ideal number of units to deliver a successful Built to Rent portfolio?
So I don't know we know the answer to that yet, but it's certainly a five-figure number. I think in our world.
And how long do you think it will take you for you to achieve that, and do you think there's enough stock for you to be able to do so?
Well there's definitely not any stock that we can go and buy today, so we have to go through the inconvenience if you like of buying the land getting the planning permission and actually doing the construction to get there. Um, so how long does that take? I think we're looking at a sort of four/five-year program to get to the 6,000 and to the 10,000 units and then beyond that we'll see.
What do you think are the challenges to delivering a successful Build to Rent development?
When you're in reasonably low single-digit yield territory, you've got to find the equation that enables you to offer your rents at levels that you know your target market can afford, and the rents have to be absolutely correlated to the salaries - the mean the average salaries of the market that we're in. So you know, you've got to price your revenue around that piece of it. But you've got to be able to build really efficiently, and yet still have buildings that are attractive in a very attractive public realm.
What role do you think Government can play in terms of developing the sector?
I mean certainly it could help on the planning system by putting more definition and more policy around what the Build to Rent sector is and what it delivers, and by helping councils understand the criteria by which we're judged when we make our planning applications. I think the second thing, and actually to be fair they're already doing it, but the HCA are quite an important lender of money to the sector and we're the beneficiary of that for sure. And when you get HCA money it tends to catalyse quicker developments of a bigger scale and of course that talks to what we're doing. I guess thirdly they can probably help us connect a business better, because our proposition around housing talks directly to the recruitment retention and wellbeing issues that a lot of business has.
A quick insight into another elephant in the room – placemaking.
Does it hold the key to enhanced returns?
Rick de Blaby, Executive Deputy Chairman at Get Living, reveals how they approach acquiring stock in a maturing sector.
Market insights include:
Janany specialises in development work and has experience acting for both registered providers and private developers in development acquisitions and disposals. Janany also has experience acting for…View Janany Kathirgamanathan's full profile