Leading property figures including Quintain chief executive Angus Dodd have suggested build-to-rent (BTR) schemes can learn lessons from the retail and hospitality sectors.
Dodd told delegates at EG’s London Residential Summit 2018 that Quintain is developing an app that could involve “gym memberships” or “deals with local retailers”, in a consumer-facing approach that can extract value from data in the way the retail sector does.
“One of the things we are working on at the moment is a state-wide app that will be available to our residents and to people who work there – to bring the whole community together with shared services.”
Dodd added there are “lots of lessons” to learn from the hotels sector from a customer-facing perspective.
“Ultimately, letting these flats is letting a commodity,” he said. “It is akin to letting a hotel room – you have to get into the mindset of being a consumer-facing business to be able to market [the product] in an imaginative and innovative way.”
Dodd also identified lessons from the hotels sector on “the challenge of managing [low-margin] businesses at scale”.
Drawing an analogy from the hospitality industry, he added there are opportunities for dominant players to emerge: “We have moved a bit beyond bed–and-breakfast, but no one has yet become the Hilton of the build-to-rent [industry], which I think is a big challenge for us all.”
Jonathan Ivory, managing director of Atlas Residential, agreed: “The sector we spend the most time talking about is the hotels sector – we use words such as ‘hospitality’ a lot. What we do is very customer-centric.
Customer service training
“When we recruit people for our operating platforms – be they managers, staff, or maintenance personnel – we find those with customer service training or qualifications are particularly useful. Hotels are a fertile ground for recruitment, both for our UK and US businesses.
“It also extends to retail – how we collect rent and maintain property. We draw a lot of inspiration from [it] as well as from hospitality.”
John Badman, director at CallisonRTKL, agreed. “Retail is a sector I’m particularly focused on: how they operate – not just [in] real estate space but how they function as brands – where they are thinking of customers and the amount of research and data that goes into it.”
“From a sector point of view, retail reacts to trends extremely quickly; they don’t just talk about it, and they have an intense customer focus in how [to] develop their product.”
Elsewhere, there were concerns over how much premium on rents investors would be willing to pay.
Mark Bladon, co-head of origination, structured property finance at Investec, said: “There doesn’t seem to be any shortage of build-to-sell schemes that offer good quality in good locations; [build-to-rent] just doesn’t get the same amenities as a purpose-built, built-to-sell scheme.
“In some of the deals we are looking at, there might be a 20-plus premium for a build-to-rent scheme. Where people are a lot more conscious about spending, would they pay that extra premium?”