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Prioritise tenants, not profit: The long term approach to Build to Rent

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Prioritise tenants, not profit says the Business Development Executive at Grosvenor Systems, as it's the long-term approach to Build to Rent.

Build to Rent is booming – preliminary CBRE data shows investment in Q3 of this year was 85% higher than in the same period of 2021. This year, a staggering £2.84bn of capital has been poured into the sector.

As institutional real estate companies seek to capitalise on this growth, with more and more launching dedicated Build to Rent arms, it is essential that these opportunities are not approached with an ‘up and done’ mentality.

To ensure that the sector grows sustainably, investors must realise that a successful Build to Rent model requires a significant time investment, with long-term maintenance and improvement according to changing customer demand and need.

We must ensure that current interest in Build to Rent does not pass into neglect – and that is why it is essential that those seeking to move into Build to Rent ensure they have their affairs in order and are able to commit to prioritising the experiences of tenants above a short-term money grab.

 

The bare necessities

Institutional asset managers are realising the potential of Build to Rent – earlier this month, Aviva Investors embarked on a partnership with Spanish developer Layetana Living, looking to develop a portfolio worth over £400m.

From investment giants to small, dedicated Build to Rent outfits, it is essential that those looking to move into the space are properly set up. Short-sightedness is a real risk for the space. The reward for proper investment, and potential profit, is huge.

Customer experience, and tenant expectation, is perhaps the key consideration for those looking to take on a Build to Rent block. This means ensuring all property management systems are aligned, with an efficient CRM; ironing out granular reporting requirements; and fully incorporating ESG concerns into plans.

Without these essential preparations, the exciting, value-add experiential elements of Build to Rent that so often hit the headlines risk falling short of expectations.

 

Innovating for the forward-thinking tenant

Tenant expectations are driving a revolution in creativity and innovation across the real estate industry. Take the commercial property market, for instance – new entrants into the market are bringing the experience of clients to the fore.

Within flexspace, we are now seeing the post-pandemic working life brought to life, with vigour. Google’s new King’s Cross office incorporates perks and services that would be utterly foreign to an office space 20 years ago: running trails, basketball courts and nap pods.

Leaders within the Build to Rent market have already demonstrated the wisdom of adopting a similar approach to that taken by the pioneers within CRE.

This means an approach which focuses on community, shared living, and tenant experience to build an offering that is attentive to the needs of the tenant and grows alongside them. From high-end luxury flats, right through to purpose-built student accommodation, services are now king.

Thought and energy must be pumped into ensuring that tenant experience remains at the heart of the sector – not profit.

In particular, Build to Rent providers should ensure that their offering evolves, to remain competitive. With new perks and benefits popping up constantly, staying still is not an option. Again, an ‘up and done’ approach will only lead to losing tenants, especially given how competitive today’s residential market is.

 

Property management systems – here to help

So, what tools are available at the disposal of those looking to move into the Build to Rent market? Innovative, tech-driven property management solutions can help ensure that time is spent on the prioritisation of tenants – by allowing managers to focus on value-add services, rather than being bogged down in admin.

As those running Build to Rent operations will know, managing properties is both admin heavy and time-consuming.

Build to Rent properties on the high-end luxury spectrum feel glossy and are expensive largely because for the tenant, everything is taken care of.

However, behind this is a business consisting of hundreds of priorities, tasks and necessities. Here, property management systems can assist.

Here at Grosvenor Systems, for example, we recently embarked on a new partnership with Spike Global, creating a novel end-to-end property management and accounting solution for the Build to Rent sector.

Spike’s innovative tenancy management solution allows for the entire process of managing tenants to be moved online. The formula is a winning one – increased efficiency leads to property managers having more time to focus on innovating for tenants.

As entrants into the Build to Rent space continue to grow in number, we have already seen numerous companies seeking to create sister companies, or spin-off entities dedicated to Build to Rent.

Often, this requires new software, new systems, a whole new approach. However, property management systems can ensure that the journey is smooth and efficient, with solutions built for Build to Rent.

Ultimately, we must ensure that the future of Build to Rent is sustainable – this means an enhanced, streamlined, tenant-oriented experience.

The future is changing constantly, and those who see quick, easy profit without ensuring their property management systems are in order risk biting off more than they can chew.

Long-term sustainable innovation, assisted by dedicated software and tech functionality, will help keep the tenant at the centre of Build to Rent.

Source: BTR News