Service And Branding Are Upping The Ante For BTR Operators
Dublin’s build-to-rent sector may not have to do too much to sell its product at the moment, but the smart operators are planning for a future when delivering additional services and amenities, attractive lifestyle and a sense of community will be vital for anyone hoping to have a competitive edge in this market.
Providing an all-round experience is already an important feature of the U.S. market, where ‘multifamily’ has been a thing for the last 30 years. And when it comes to rented residential, where the U.S. goes, Ireland and the U.K. follow, with their own idiosyncrasies of course.
Michael Ablon, principal at PegasusAblon, which has developed award-winning schemes in the Dallas/Fort Worth area, sees this as simply catering for changed requirements rather being a result of a more mature market.
“As we’ve morphed from our baby boomers to our millennials we’ve simultaneously morphed from a consumer-based economy to an experience-based economy,” he said. “When you’re in a consumer-based economy you’ll have a greater emphasis on quantity. When you go to an experience economy you’re going to quality — not necessarily the quality of having a granite countertop, but of the overall experience.”
He describes it as a paradigm shift in what is wanted out of housing. “Now housing has an amenity piece to it.”
Within his own developments in Frisco and Dallas Design District, there is a strong focus on common areas, like the gym and the pool. “It’s almost a resort,” he said.
Size may not be a deal breaker inside the apartments, but some things are essential. “I put a lot of high technology in all of my units. There’s free WiFi and a big flat screen in all of them. And it’s not just a gimmick. That’s what matters to this generation.”
The challenge going forward will be to reflect the current move toward a more meaningful economy. “For me, it’s about staying focused on the things that move our hearts, our souls and our essence. If I can focus on those and derive out of them answers that create a living experience that continues to transcend shade and shelter more and more, then I will do well in terms of delivering a good product.”
The Dublin experience
In the main, the companies that are doing PRS well in Dublin have either been operating in the U.S. market or have been influenced by what is working there.
One of the biggest players in the Dublin build-to-rent space is Kennedy Wilson, which operates more than 21,000 multifamily units in the U.S. and has one scheme with just under 300 units in the U.K. In Ireland, the company has around 2,700 residential — either already up-and-running or under construction — across 11 schemes, primarily in Dublin.
According to Kennedy Wilson Head of Ireland Alison Rohan, there’s an emphasis across all these properties on professional on-site management and high-quality resident amenities, including gyms, cinema and games rooms, business centres, professional kitchens, entertaining areas and resident lounges.
Rohan said build-to-rent is as much about services as it is about property. “Long-term success will be driven by the quality and consistency of the service offering,” she said. “Because of the strong focus on resident amenities and resident experiences, there are significantly more BTR touchpoints than traditional commercial real estate. The service offering is what will distinguish operators and the branding of that offering is expected to play a much more important role in the market, as it matures.”
Improving the bottom line
At the smaller end of the scale — so far — are Tristan Capital and operating partner SW3 Capital, who own the 197-unit Neptune House in Honeypark, Dun Laoghaire, and five blocks with 185 apartments in Elmfield in Leopardstown. The properties operate under the Vert brand.
“We’d done a lot of research in the U.S. and we’re very much U.S.-facing in our approach to the PRS or multifamily sector,” SW3 co-founder and Managing Director Tom O’Mahony said. “We felt it was important to have a service offering with the PRS product, which wasn’t necessarily the obvious thing to do in Europe.
“In our view, if you offer a level of service, you have the opportunity to reduce your void periods and to keep your residents longer, which has a bottom line benefit.”
Amenities in Neptune House include a gym, a concierge room, WiFi in the common areas and office pods that can be booked. In the residents' lobby, there’s a ‘TransitScreen’ displaying live information on all the local transport options.
The company has also teamed up with a dry cleaning and laundry service. “If we can grow the platform to significant number we would like to be able to offer even more services and have a full roster of contractors or employees to carry out maintenance internally.
“Maybe, when we [are] at 1,000 units we can look at adding some complementary services, but to really allow the platform to have full bells and whistles, we probably need about 1,500 units.”
And a company that has very consciously modelled its Dublin offering on its U.S. prototype is boutique co-living operator Node, which opened a 51-bed property on Fitzwilliam Square earlier this year.
The company launched its first co-living location in Brooklyn, New York, last year, has since added London and Manchester, and will open in Los Angeles in the coming weeks, followed by Toronto and Seattle.
“Node is associating its brand throughout the tech corridors,” CBRE Director Tim MacMahon said. “It will attract people working for Google in Toronto, Dublin and London and we’re starting to see this become more of a part of the market.”
Node founder and CEO Anil Khera described his company’s target residents as globally minded professionals in their 20s and 30s who have a creative or entrepreneurial slant. “And typically we target people moving to a city for the first time or within the last little while,” he said. “What we can offer them is a way to navigate and get really under the skin of a city and acclimatise to it.”
On the one hand, Node offers the convenience factor — fully furnished to a very high standard: think interior design finish, Smeg fridges and Nest smart systems — and all the necessary technology and utilities bundled in.
The other big selling point, Khera said, is providing a sense of community. “The reason we called it Node is the idea of connecting people across cities, across the residences,” he said. “The brand really was all about reflecting that ethos and having people identify with a Node type of experience. The brand is very important for reflecting the values we have and the customer we’re trying to approach.”
As well as expanding internationally, the company is looking for further opportunities in Dublin. “We know there’s a huge demand from people a slight price point further down,” Khera said. “We could go to neighbourhoods that allow us to have rent at a slightly lower level. They’d all be fairly central though. We’re not really a suburban, commuter belt product offering.”
MacMahon believes operationally intensive BTR offerings will become increasingly important in the Dublin market. “People are looking for an experience-led type of product — that’s what they’re getting in other markets.
“At the moment there’s so little supply, high rents are being achieved,” he said. “When more supply is in the market, having the right amenities and the right operating platform will be key.”