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From Build-To-Rent to Built-To-Rent: From Assumptions To Reality
Society of Property Researchers | BTR 26 March 2019
Society of Property Researchers | BTR
From Build-to-Rent to Built-to-Rent: From Assumptions to Reality
Chair: Speaker:
Alex Moss, Director Cass Real Estate Research Centre
Julia Middleton, Research Consultant Dataloft
Moderator:
Cléo Folkes, Founder Property Overview Ltd
Panellists:
Dr Robin Goodchild University of Aberdeen Bus. School
Jonathan Monnickendam Development Debt Consultancy
Andrew Moffat LIS Real Estate Consultancy
Charles Fairhurst Fairhurst Associates
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Cass Real Estate Research Centre Building the bridge between theory and practice
From Build-To-Rent to Built-To-Rent: From Assumptions To Reality Today we will be using Sli.do to collect questions and to perform a live poll. To join the conversation: • Log in to the Cass Guest WiFi • WiFi code: 91gqjvym
• Open your browser on your mobile or tablet • Go to sli.do • Enter the event code #E381
• Please note that this event is being recorded today
Society of Property Researchers | BTR 26 March 2019
From build-to-rent to built-to-rent
Dataloft Rental Market Analytics (DRMA)
Julia Middleton
March 2019
BTR growing … but only a drop in ocean
2
Build to rent
• Gathering momentum
• 30,000 units operational
• Another 110,000 in the pipeline
PRS
• 4.5 million households
• BTR = less than 1%
Dataloft dataset
• 1.4 million tenant references over 5 years
• c.24% of market
• c.30,000 new lines a month
Source: BPF, EHS
Understanding rental growth
3
Rents grew in most cities
Top
performers
Local picture important
Peterborough
Brighton
Leicester
Coventry
Consistent factors
Rents fell in 7 cities
Rental growth outlook
4
1 London
2 Reading
3 Coventry
3 Slough
5 Leeds
6 Southampton
7 Milton Keynes
8 Bristol
9 Cambridge
10 Brighton
A starting point for investment objectives
Local rental markets
2
Hayes
Established market
Series of trade-offs Locality vs amenity
How far to tempt
higher paying tenants?
Rental premium?
6
What is rent?
Emerging market
Cover costs: gross to net
Wider market always relevant not a monopoly
9.3% rental
premium JLL
Watch the affordability ceiling
6
31% line by line gross income
Limited local variance
High earners
vs low earners
Affordability ceiling
31% London overall
22%
Top earners 39% Low earners
33% Hayes
Who to build for?
7
Majority young
professionals
but not exclusively
Evolve with
product
Average age:
London 31
Hayes 36
Market needs?
Family homes
Hayes
London
28% COUPLES
21% FAMILIES
27% SHARERS
24% SINGLES
25% COUPLES
49% FAMILIES
6% SHARERS
18% SINGLES
Most tenants are local
8
Renters move
short distances
Majority less
than 5 miles
BTR tempt tenants
from further?
Trade off between
location/amenities
Hayes
London
26%
14%
20%
30%
24%
25%
60% Up to 5 miles
79% Up to 5 miles
Most tenants
are local
10
Huge potential market
10
Established rental market
Widen target demographic
Tenants stay local
Affordability ceiling
Rental growth = earnings growth
Appropriate premium? Cover costs?
Not a monopoly unless brand power?
Optimise your
business model
Disclaimer: This report is produced for general information only. While every effort has
been made to ensure the accuracy of this publication, Dataloft Ltd accepts no liability
for any loss or damage of any nature arising from its use. At all times the content
remains the property of Dataloft Ltd under copyright, and reproduction of all or part of it
in any form is prohibited without written permission from Dataloft Ltd.
Date of publication: March 2019
Analysis, editorial, design, graphics and charts by Dataloft.
Unless otherwise specified source
is Dataloft Rental Market Analytics
Society of Property Researchers | BTR | Development Debt Consultancy 26 March 2019
•Premium Rent
Rental Growth
•Gross to Net
•Yield
From Build-To-Rent to Built-To-Rent: From Assumptions To Reality
How best to suit your development for rental?
Society of Property Researchers | BTR | Development Debt Consultancy
26 March 2019
Make management part of design and analysis process
Create a base scheme and spec
Look at each project on its own MERITS
Analyse the true requirements for MAINTENANCE
Be careful how you MEASURE success
Look for improvements in spec or service which increase net rent
Society of Property Researchers | BTR 26 March 2019
Leading UK Institutional Investors in Build-to-Rent
PRS investors platforms and listed platforms
Society of Property Researchers | BTR | Fairhurst Associates
Investors with their own Platforms
ADIA/Fizzy Living
Annington Plc
Argent/Related
CDL
Country Gardens
Dorrington Plc
Get Living
Dandara Group
ECO World/be-here
Essential Living/M3/WSIB
London’s historic estate/Grosvenor
Harrison Street/Apache Capital
Henderson Park/Greystar
Heitman
Ivanhoe Cambridge/Residential Land
Knight Dragon/Greenwich Peninsula
Lancashire Pension Fund/ Hayes & Heylo Housing
Lone Star/Quintain
Malaysian investors/Battersea
Pears Family
PfP Capital/USS
PSP Investments/Greystar/Greenford
R&F Properties/VNEB
Westrock/Platform
The Wellcome Trust
26 March 2019
PRS investors platforms and listed platforms
Society of Property Researchers | BTR | Fairhurst Associates
Listed or REITs
BL/CapCo/Landsecs/Intu/Unibail-Rodamco-Westfield
Civitas Social Housing REIT
Grainger Plc
Residential Secure Income (ReSI)
Telford Homes/M&G/Invesco
The PRS REIT/SIGMA
Triple Point Social Housing REIT
Watkin Jones plc
26 March 2019
Society of Property Researchers | BTR
Panel Discussion. Please send us your questions via sli.do, #E381
Chair: Speaker:
Alex Moss, Director Cass Real Estate Research Centre
Julia Middleton, Research Consultant Dataloft
Moderator:
Cléo Folkes, Founder Property Overview Ltd
Panellists:
Dr Robin Goodchild University of Aberdeen Bus. School
Jonathan Monnickendam Development Debt Consultancy
Andrew Moffat LIS Real Estate Consultancy
Charles Fairhurst Fairhurst Associates
UPCOMING SPR EVENTS
Society of Property Researchers | BTR
Joint SPR / ULI Seminar: Green Buildings – Are There Financial Benefits? – Tuesday 2nd April 2019
Site Visit: Travis Perkins / Unite Student Accommodation: St Pancras – Tuesday, 9th April 2019
SPR Research Prize Presentation – Prize Winners’ Presentation – Wednesday, 15th May 2019
SPR Summer Drinks – Thursday 11th July 2019
Full details are available at : www.sprweb.com
Annual standard membership fees for the SPR are £60 pp, with most events free or at a nominal charge. To find out how to join, visit our
website www.sprweb.com
A CPD Certificate for this event is available. Please email [email protected] to request one
26 March 2019