In Build-To-Rent Developments, Pampering Shouldn’t Interfere With Practicality
The novelty of build-to-rent has a tendency to cloud the vision of investors and developers. In a sprint to escape the bare-bones model of buy-to-let apartments, they have launched into an amenities arms race, building swimming pools, fine dining and concierge services to attract customers. But is that really what customers want?
A movement has begun to bring BTR back down to earth by focusing on practicality and efficiency. Rather than building over-the-top amenities, BTR investors and developers must offer multi-use spaces, welcoming finishes and services to make apartments feel like home. Practical and efficient amenities can also lower operational costs and increase customer retention.
“Some build-to-rent developments want to look and feel like hotels, but the customer really doesn’t want to live in a hotel,” FirstPort Business Development Manager Jeremy Ogborne said. “Customers want amenities that complement their lifestyle, not necessarily a swimming pool in the basement or a ping pong table on the roof. People want to return to a home that’s safe, comfortable and that fits their purpose.”
The UK currently has 139,508 BTR homes either complete, under construction or in planning. Property and asset managers are still experimenting with how best to keep customers. For FirstPort, the UK’s largest residential property manager, an emphasis on the customer and usability is paramount.
“The novelty of having a large gym or a swimming pool can wear off quickly,” Ogborne said. “After two weeks, those are huge chunks of space that go underutilised. Beyond the massive upfront investment, there’s upkeep, health and safety risks, as well as the extra staff needed to run those amenities. Those translate into massive operational costs.”
Many customers are already members of high street fitness clubs such as PureGym or David Lloyd, Ogborne said. So rather than a large gym with expensive machines, he suggests a smaller, multipurpose room with limited fitness equipment that customers can also use for yoga or Pilates, which can also double up as an event space or as a playroom for children.
As more customers work from home, spaces for coworking are becoming a necessary part of any BTR project. Investors and developers can offer boardrooms with high-speed internet that customers can use to host meetings or clients. Unlike many amenities, workspaces can actually generate income, by charging a fee to rent the spaces.
“The costs of operating a gym or pool can’t really be recouped, but a coworking space can generate revenue,” Ogborne said. “Work is becoming more flexible, and we want to provide a space where customers can balance life, work and play.”
The top four deciding factors for customers are price, location, the quality of the space itself and the community — property amenities rank fifth. So, once they’ve chosen a location, BTR developers and operators are best off spending on quality interior finishes and services that make the space welcoming.
While it is difficult to quantify what makes a development 'feel like home', Ogborne mentioned that trained and conscientious on-site staff are central to improving customers’ day-to-day experience. Quality white goods, efficient, attractive lighting and fixtures, and safety measures such as CCTV also help customers feel comfortable.
“FirstPort has a concierge academy that all our on-site staff are required to attend,” Ogborne said. “Our staff are discreet when they need to be discreet, helpful when they should be helpful, and will quickly get to know all the customers by their first names. The customer should feel safe and secure without feeling harassed, and unlike a hotel, there won’t be any bellboys jumping out to show you to the lifts.”
Investing in services rather than amenities can also help BTR schemes come to market more quickly. Rather than waiting for large structural projects like a swimming pool or car park to be completed, a new development may lease a portion of their units while the rest remain unfinished. These first customers will act as brand ambassadors and help bring new customers in, creating a competitive advantage.
BTR schemes should also invest in hosting community events. If a customer makes three friends in their building, they become more likely to renew their lease, so creating programming for customers can quickly reduce churn.
“Since the 1980s, there had been a stigma against renting in the UK, the focus instead being on homeownership,” Ogborne said. “Now that this stigma has been erased we’re ensuring that BTR customers are proud of the place they call home.”
Even while demographics and customer preferences are shifting, Ogborne said that some things in the UK — like pride in where you live — should never change.
“As Brits, we like to talk a lot about the weather and our homes,” Ogborne said. “Renting has become the tenure of choice for customers who want fit-for-purpose, flexible and affordable homes. We want our customers to feel special about where they live. We know we've succeeded when all of our customers are calling their development home.”
This feature was produced in collaboration between Bisnow Branded Content and FirstPort. Bisnow news staff was not involved in the production of this content.