Transcript

The elephants in the Build to Rent room

Does placemaking hold the key to enhanced returns?

5 things operators need to know

5 insights in 3 minutes

Moving on, what have you learned in terms of operational management through the East Village?

I think we learnt that you can challenge the market. I think one of the concerns that we've always had, one of the reasons we came into the sector, was it had such a bad reputation. It was always done the same way and I think coming into this and to make us efficient we've made some changes. So obviously last year with something like scrapping security deposits.

So in terms of scrapping deposits then, what kind of feedback did you get?

As well as offering it to new residents, we've actually been transferring back to our current residents, and so I would be walking around the East Village and having current residents saying to me ‘it's great but why?’. And to us it was the right thing to do, absolutely. Why should new people benefit but our loyal current customers not benefit? So we've have very strong feedback. And I think what it's also done is it's given us and hopefully others our confidence to really challenge some of those preconceptions. So when we first launched we did no fees which at the time everyone was shocked, but now it's kind of everyone's expecting it, and Government has taken the policy on three year tenancies as well. We're now up about 80% of our residents now taking three tenancies. So we really really challenged those preconceptions, and as I said, they're giving us efficiencies as well.

How did you go about setting your rents?

Historically people always tell us about location location location. I think actually people are moving somewhere for the service and for the offer, so we're starting to see more of that and I think that's where we build the brand value. So when we look at the rents, we're looking at what attributes the area's got how that compares to other areas in London. That's one aspect, but, you know there is also quite simple supply and demand that you're always adhering to.

And how much do you factor in your service or the additional service that you provide in terms of setting your rents?

I think you have to be very careful that you're also aware of the market and not just looking at your own product, so we believe that service we give in this offering here his worth a premium, but we’re also alive to the fact the way that the rental market moves.

What flexibility do your customers expect in terms of their tenancies?

Well when we first launched we found less than half people were looking for one year tenancies, and we were a bit confused because we felt that the three year tenancies we were offering were based on about 2,000 interviews and online surveys to kind of derive that. And what we found is that we weren't actually educating our staff enough to explain how to sell that piece, and when we did explain to people that it’s a three year tenancy, but you have flexibility within that, at six months you can give two months’ notice at any point. Giving them the flexibility but giving them the security of tenure has been huge. And that's why I think we've gradually moved towards the majority of people going for three-year tenancies, and actually I think people will embrace five-year a longer term ones.
 

Build to Rent: 5 things operators need to know

A quick insight into another elephant in the room – placemaking.

Does it hold the key to enhanced returns? 

Find out what Neil Young, CEO at Get Living, has learnt about operational management at the East Village, London.

Market insights include:

  1. Why challenging the status quo pays off
  2. Get Living’s approach to setting rents
  3. The growing trend towards long-term tenancies

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