6 November 2019

A day in ten tweets- the UKAA BTR Conference 2019

31st October 2019 was not necessarily as auspicious as expected by many, but it was a day of discussion on build to rent at the UKAA annual conference. The day came shortly after research reported that UK BTR had grown by 20% in the last year, and there was certainly a buzz as professionals across the industry came together in Mayfair. For those unable to attend, here are ten tweets to hint at the discussion points of the day.

As keynote speaker, Greg Marsh, an investor and entrepreneur, and particularly well known as co-founder of onefinestay, posed questions as to how the industry can learn from customer centric industries. Using several images of different BTR product, Greg asked the question: “who built what?”. For Greg, similarity in stock is a challenge for the sector. Product differentiation is key. And achieving a recognisable, reputable brand is the ultimate end goal.

For Greg, in order to command a price premium, you need that “branded” service experience. Greg used the example of the Four Seasons hotel chain as the pinnacle of excellence in hospitality. If a product is perceptibly different, customers will pay more. Yet at the same time, Greg mentioned that part of the potential of BTR is affordability/ the difficulty of home ownership. How do you reconcile the two? Is there a ceiling on what residents will pay, irrespective of the level of service and amenities available? As one attendee later remarked in discussion with the author, are we “romanticising” the concept of “customer service” in the sector? After all, many residents simply want somewhere affordable to live and investors simply want a product that works for them.

You can’t escape a conference these days without a discussion around tech. And rightly so. Henry Pethybridge, Director of Wiredscore Home, led the discussion, identifying that we spend 80% hours consciously online every day, have on average 7 connected devices and 90% of the world’s data has been created in the last 2 years.

However, according to Henry, we are still in the “foothills” of change, with data creation set to explode and the internet of things still to take off. A scary thought for BTR landlords with customers who now arguably consider connectivity as a “human right” or “utility” and will expect the very best as innovation continues. How do you future proof a building for change, and therefore protect a long-term income stream? Unsurprisingly, for Henry, thinking ahead in the design phase is key. It is far more expensive to retrofit than introduce digital infrastructure at the outset. For example, are BTR developers anticipating 5G? According to Henry, the current insulation properties of walls and glass may undermine the benefit of high speed 5G- radio signals cannot penetrate these. Are developers thinking ahead/ investors asking such questions?

There is plenty of chat in the BTR sector about wellbeing. Henry couldn’t escape the question about the tension between constant connectivity and arguably, the need to switch off. As Henry made clear, connectivity free zones will not undermine a Wiredscore Home rating. Plus, as Henry hinted, are connectivity issues a source of stress? Do wellbeing and reliable connectivity go hand in hand?

As the UK sector moves forward, what can we learn from experience and the more mature US market on “leasing-up”? Three takeaways from the panel.

First, operators want early involvement. For Barbara O’Steen at Greystar, the last thing you want is the developer “value engineering out” a key aspect of the scheme that might be required to secure occupany.

Second, you need to balance your tech and people (“talent”) budget. Residents want a face, not just an app (for example, when the boiler breaks down!).

Finally, will the UK embrace the sharing of data, as is the case in the US? For the US members on the panel, the tweet below says it all. From the fantastic, plain speaking Michael Howard, MD of Manchester based Urban Bubble, there was a rather resigned acceptance that at least in the near term, this is not likely. However, with the UKAA offering help in this regard, who knows?

From the author’s perspective, the key takeaway is the feeling that the industry needs to educate the public as to what BTR can offer- not only as a home, but also as a career opportunity. As David Butler, UKAA CEO stated in his opening conference remarks, customers need to recognise what BTR is about, and this is one of the key objectives of the UKAA.

Finally, many congratulations to all participants in the “BTR Game” on the day, but particularly team winners Brickin It- Rebecca Taylor at Long Habour, Simon Saint at Woods Bagot, Peter Wyatt at Knight Frank and Steve Edge at Steve Edge Design. Well deserved!

Edward is a senior associate in our Commercial Real Estate team.

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