Scotland Build to Rent Market Jan11

Scotland Build to Rent Market

The rise of the build-to-rent sector is changing the way we live – but gaining support from local authorities is critical to its success. Now firmly established in London, Manchester, Birmingham and Leeds, the market is also taking off in Scotland – but how is this market different, and what are the challenges for investors and developers? Yardi brought together a panel of industry thought leaders to discuss the main issues. Iain Murray, managing director, LIV Consult Dan Cookson, digital innovation consultant, Homes for Scotland Christa Reekie, commercial director, Scottish Futures Trust Rick de Blaby, deputy executive chairman, Get Living London Peter Carus, associate, GVA Claer Barrett, Financial Times (chair) CB: How does the Scottish build-to-rent market differ from England’s?   IM: Looking at demographics, earnings and the overall rental market, Scotland is not that different from Leeds, Manchester or other big English cities outside London. Lots and lots of people rent. The difference is that Scotland, at the moment, is behind the curve. The Independence Referendum [in 2014] created a great deal of uncertainty, which held the market back. Talk of a second referendum had the same effect. If that were to start up again, investors would begin to get nervous. For now, investors seem to have got over Brexit and the ‘indyref’ – their money has to be put somewhere. PC: The key difference is that build-to-rent is taking its time to get going in Scotland. At a national level, there’s clearly been a big push. Now that’s beginning to come down to local government level and the planning authorities are supportive of new build-to-rent projects. RdB: The further you get from London and the South East, the more open for business local authorities are. The planners in Glasgow have been very receptive, and the new planning advice note that has recently come from the Scottish government is very useful too. IM: It does help that Scotland has a majority government too. CB: How are Scottish leases different – is this a problem for investors? RdB: The Scottish residential lease is distinctly different. When a tenant leases an apartment, effectively they have indefinite security of tenure. That might put some investors off; it certainty doesn’t put Get Living off as our model seeks to accommodate longer resident commitments anyway. IM: As a build-to-rent management company, our clients want people to stay for as long as possible. Turnover in tenancies costs money. CR: The Scottish system creates a lot of certainty for tenants that simply doesn’t exist in England. IM: Scottish leases are something that will put investors off if they don’t do proper research. Some build-to-rent investors will have an endgame of eventually selling the flats they develop. And they still can. There are extensive grounds for ending a lease and evicting the tenant; reasons include that you are selling the property, it is being refurbished, they have broken the tenancy agreement, they are being anti-social. As a build-to-rent management company, we are quite keen on this legislation as it gives me additional security. But from a conceptual point of view, investors outside Scotland may find it difficult – anything different from the norm, and some investors will think it’s easier to put my money in Manchester or Birmingham. CB: How have you changed your business model for the Scottish market? RdB: There are three, possibly four, cities in Scotland where build-to-rent could work. We have bought a 7.5-acre site to the east of the Merchant City in Glasgow, and we’re about to submit a planning application for 727 private rental with 99 student units. Our model is all about scale – we don’t do under 500 units. It is tempting to take what works in London and replicate it. But our focus groups in Glasgow have provided some valuable insights. For example, renters up here in Scotland don’t do as much apartment sharing as those in...

Build to Rent

LONDON – Technology has changed all our lives so fundamentally in recent years that it is sometimes difficult to look back to an era when things were done differently. Today’s normality was, just a short time ago, unthinkable. Banking is a good example. Today, we take it for granted that we can access our accounts at any time and transfer money and pay bills quickly and cheaply. The chequebook is still available for those who need it, but it won’t be long before they too are consigned to history. Then take taxis. While in London at least, using a cab was once the preserve of those with substantial salaries – or travelling at somebody else’s expense – now the rise of Uber and others means that getting a ride home is a real option for many people. Property has, of course, been slow to embrace the benefits that digital technology can bring – one estimate is that the industry is around 20 years behind financial services – but that is starting to change and at pace. Just a few years ago, if the property press mentioned technology at all, it was to reference the influence of the likes of Rightmove or Zoopla. Today the phenomenon has its own name: proptech. A lot of attention has been paid to how proptech is disrupting the industry, most notably through big data potentially making the role played by many agents redundant. That is obviously a cause for concern and the introduction of new ways of working will obviously have to be done with care and compassion. But proptech also has the potential to bring huge benefits to both property companies and their consumers – and without the need for anyone to lose their jobs. In no sector...

UK Honor Nov22

UK Honor

Yardi, a global provider of real estate technology, was proud to accept the Property Management Software Provider of the Year award at the recent Property Week All-Star Management Awards, which took place at the Grosvenor Hotel in London on the 3rd of November. The Property Week Management All-Stars Awards are held annually and celebrate excellence across all segments of the management of real estate – from AST and block residential, multi-occupier office and retail, to industrial and logistics. Property Week is the leading news magazine in the commercial and residential property market. Packed with news, features, opinion and analysis, Property Week keeps readers fully briefed on all the latest information from the industry, including major property deals, development opportunities and investment prospects. Martin Betts, Yardi sales director for the UK & Ireland, was on hand to collect the award recognising the company as Property Management Software Provider of the Year. “We are thrilled to have won this award and believe it reflects our continued commitment to providing innovative solutions focused on enhancing the customer experience and optimizing our clients front and back-office operations,” said Neal Gemassmer, vice president, international for Yardi. “We continue to actively invest in growing the suite of solutions that we provide to the rapidly growing residential ‘build to rent’ sector, as well as staying focused on investment, asset and property management solutions for the commercial market.” Yardi would also like to congratulate several clients that received awards during the evening, including LIV Group, awarded the BTR/PRS Operator of the Year, and GVA, which was named Property Financial Advisory of the...

NewRiver REIT Mar27

NewRiver REIT

The British retail investment market joins the rest of the United Kingdom’s business community in facing a host of unknowns in 2017.  Chief among them is the timing and impact of the UK’s exit from the European Union following the outcome of the referendum in June 2016. Yardi caught up with one its partners, NewRiver REIT, a specialist retail and leisure investor, asset manager and developer whose convenience-led positioning means it is uniquely placed to navigate these uncertain times. NewRiver’s £1.3 billion portfolio includes 33 community shopping centres, 22 retail parks, 16 high street assets and 350 pubs. The portfolio provides consumers up and down the UK with its daily essentials – those items essential to daily life, the things consumers require, opposed to what they simply desire. Fundamental to the success of the business over the past seven and half years has been how NewRiver has engaged with and satisfied all the stakeholders within its chain, from store customers, retailers, peers, advisors and local authorities all the way to its institutional investors and shareholders. “At the heart of the retail sector is the customer and our business begins with building and retaining consumer loyalty,” says Emma Mackenzie, a Director at NewRiver who manages assets in Scotland, Northern Ireland and the north-east of England. “At the local level, we make sure our shopping centres satisfy the needs of the towns they serve. Its about providing a variety of products and services at a price the customer can afford. Furthermore, we work hard to ensure the environment is fit for purpose – and that includes such basic factors as the centre being clean and accessible as well as bright and attractive and providing somewhere to sit down or get a cup of tea.” Brexit has triggered...

Private Rental Sector Mar15

Private Rental Sector...

GREAT BRITAIN – The Private Rental Sector (PRS) property management market has reached a critical juncture. Consumers are becoming more aware of the benefits of improved services where they live, and both landlords and management companies are trying to find ways to harness that growing enthusiasm to get ahead of the rest of the market. There’s new technology to adopt, new processes to learn and new skill sets to instill in staff – and it’s all happening very quickly. The fact that it’s happening at all should be welcomed: there used to be a time when the market thought about PRS merely as a block for tenants to live in, almost treating it like commercial property. Now, they are becoming communities with residents, brimming with potential to make people’s lives better. Coming from the US multi-family market, it’s great to see that some of the best practices I was used to seeing there, which took years to take hold, are now being implemented in the UK at a more accelerated pace. Many more companies, such as Be:here and Westrock, have been to North American markets to see what can be achieved when we let go of “what’s always been done.” It’s not so much adoption but adaption: learning from the successes of other markets and building value from that in your own way. It can range from something as simple as having a concierge or resident services person at the front desk of a development that knows who the residents are and accepts packages, to something more complex that changes the business structure, such as direct letting to the public without outsourcing to agents who are often strapped for time and stretched between many clients. Bringing the process in-house means that a brand is...

Build-to-Rent Mar12

Build-to-Rent

GREAT BRITAIN (March, 2017) – It is no longer about landlords; today’s property managers recognise that happy residents are at the heart of any successful scheme. Yardi invited a panel of experts in Leeds – a ‘northern powerhouse’ city heavily invested in cutting edge build-to-rent development – to discuss the rapidly-evolving sector Graham Bates – Founder and chief executive – LIV Group Jonathan Pitt – National director, corporate PRS and build-to-rent, Countrywide Joanne Pollard – Director – Five Nine Living, Fresh Student Living Andrew Wells – Partner and non-executive chairman – Allsop Letting & Management (Interviewer) Claer Barrett – Personal finance editor – Financial Times (chair) What is the biggest challenge for the build-to-rent sector? Joanne: There are three main challenges. Firstly, there’s not enough stock. Everyone wants to pile in from an investment perspective – and if you want to buy assets producing rents, that’s a challenge. Secondly, we’re all learning about this together. There are new practices and we need to find the best ones. And finally, costs. How much of a premium are people prepared to pay? Jonathan: I agree – the big challenge is where the private rented sector (PRS) sits in the market. What is the premium people will pay to live in a well-run building with amenities? And what about mid-market level? Graham: PRS is not the right label. What we do is build-to-rent. The private rented sector as a whole includes buy-to-let. We are a segment of PRS but what makes us different is that we are building for long-term rental. We are starting to see what I call ‘live learning’. As this sector started to take off, people talked about what might happen. Now we’ve got people living in buildings. We have data. We can conduct...

Focus on Manchester Dec14

Focus on Manchester

UK Think Tank: Insight from a recent real estate roundtable held in coordination with Property Week. Manchester is one of the UK’s most successful locations for large-scale private rented sector projects. But what are the drivers of success? Yardi brought together a think tank to discuss future developments in the sector. OUR PANEL OF EXPERTS Tom Bloxham MBE – founder, Urban Splash Matthew Howard – deputy fund manager, Hermes Real Estate Investment Management Antonio Marin-Bataller – investment executive, PATRIZIA UK Stefan Trebicki – project architect, SimpsonHaugh Paul Winstanley – partner and analyst, Allsop’s private rented sector and build-to-rent team Oliver Wolfryd – operations manager, Moda Living Claer Barrett – personal finance editor, Financial Times, and contributing editor, Property Week (chair) Why have you all chosen to invest and develop build-to-rent (BTR)schemes in Manchester? Antonio: Manchester scores highly from a demographic point of view, and the high level of interest from institutional investors makes the city a compelling story. The choice of city centre sites was relatively ample and it’s a very walkable city. Young people want to be in walking distance of transport, work, entertainment and friends, and Manchester has one of the highest retention rates for students following graduation in the UK. Matthew: Manchester was an obvious choice for us – it has all the drivers of urbanisation and the city centre has undergone a renaissance. Tom: When I first came to Manchester years ago, there were 200 people living in the city centre and you couldn’t buy a pint of milk. Now 30,000 live here, and I believe it’s only just started – there will be a lot more growth. BTR is very popular here – is Manchester going to have an oversupply problem? Tom: What I do worry about is that...

British Mixed-Use Oct13

British Mixed-Use

Editor’s Note: As part of a recurring series in partnership with Property Week,  Yardi hosts Think Tanks on real estate development trends in Great Britain. Recently, Yardi brought together a panel of experts to discuss future developments in mixed use, a concept that is gaining traction in the region. The Panelists: Victor Nicholls Assistant Chief Executive – Bracknell Forest Council Michael Auger Regional Director, South – Muse Developments Alistair Shaw Managing Director (TV Centre) – Stanhope Ben Giddens Executive Director – Development – Quintain Alan Harris Partner – Montagu Evans Claer Barrett Personal Finance Editor – Financial Times (chair)   CB: Let’s begin by debating what have been the biggest changes to mixed-use over the past decade. BG: The biggest change was the last recession and what that meant for development sites. With the residential tap turned off, you had to look to other uses to bring schemes forward. MA: Mixed-use is the new normal. The biggest change has been the perceptions of funders and occupiers. Ten years ago, they might have felt a mixed-use scheme was ‘pushing the boundaries’ and it was hard work to convince funders in particular that a scheme was going to succeed. Now, they actually want to invest in mixed-use schemes – that’s a fundamental shift. VN: [There is more] enthusiasm from local authorities towards mixed-use, and much more flexibility. Yes, we like our zoning and masterplanning, but that comes from the pressure we’re under to deliver housebuilding targets. But I definitely see more flexibility in the public sector. BG: We have flexible planning consent on several plots of land at Wembley Park where we have outline consent from the local authority to develop offices, residential, hotel space or student accommodation above ground-floor retail. This allows us to respond...

Big Data and Retail Jul14

Big Data and Retail

Advances in technology are giving the retail property sector a helping hand to define compelling offerings through the use of big data. Developing financially successful retail centres is challenging. In fact, it’s widely regarded that real estate companies, invested in retail assets, are among the leading pioneers of strategic real estate management. Successful strategies are born out of understanding the best approach to engage shoppers with the right tenant mix to suit regional trends as demographics change and are impacted by regional economic, cultural and political circumstances. Adapting a retail offering and providing new ways of engaging retailers and consumers while delivering services that enhance relationships, drive down costs and deliver value for owners are undoubtedly key. However, at the very heart of any successful strategy is one, mission-critical element – data. With the retail sector generating more data in a single month than many other vertical real estate markets, the use of simple tools and spreadsheets is redundant as firms struggle to gain valuable insights into retail operations and trends. Business technology is undoubtedly a major driver. Helping provide a solid, error-free foundation to house data is one thing, but the power comes from delivering a seamless, real-time framework that enables employees to analyse the data in such a way to deliver sound retail strategies. In an industry that is so invested in defining compelling offerings through the use of data, has the technology sector risen to the challenge? The most successful retail real estate companies are now embracing the latest technology to support their strategies and the leading software providers are raising the bar. Cloud-based offerings now enable companies to host their data in a single secure database, providing a risk-free environment that delivers real-time access to strategy-shaping analysis to desktops and...

Tech Challenge

Note: the following piece by Richard Gerritsen, Regional Director for Yardi European sales, was originally published in Property Week of Great Britain in June 2016. Reprinted with permission. It seems that almost anything is available to us now at the click of a mouse – or more often a tap on the screen of our phone. What is the population of Botswana? How do I get to my next meeting? Does the restaurant that I want to go to take bookings? Does it have good reviews? And where is best for a drink afterwards? It has become commonplace now to have all these questions answered almost instantly via mobile technology to the extent we now take it for granted. I may be showing my age, but I can remember a time when I used a physical map to find my way around; my daughter has never used one and wouldn’t know what to do with it. That makes me feel very old, but we must remember that this generation – which has grown up in a world that is contantly connected, where everything, it sometimes seems, has an app – is the one that is about to take over. Is the business world in general – and the property sector in particular – ready for this sea change? I’m not sure it is. Yes, there is innovation and a burgeoning proptech sector, but overwhelmingly the world of property remains firmly rooted in the old ways of doing things. If I want to buy a book or tickets to the theatre, all the information I need is just a few clicks away. Paper chase But if I’m an investor and I want to buy a £100m building, it is hard to get the information I...

Yardi Think Tank Jun26

Yardi Think Tank

LONDON – Industrial property has emerged as one of the strongest performing asset classes this year, apparently brushing off the threat of Brexit as consumers shop – or rather, click – until they drop. The rise of e-commerce means tenant demand is robust, with record rents being achieved in tightly-constrained urban areas where logistics space is competing with residential. However, occupiers are having to invest heavily in technology. In a continuing series of think tanks, Yardi brought together a panel of experts to discuss these issues in the European real estate market. Panelists: Claer Barrett, Financial Times – Chair Alan Holland, Business Unit Director, Greater London – Segro Richard Croft, Chief Executive – M7 Real Estate Mark Bowden, Partner – Caisson Investment Management Michael Williams, Investment Manager – M&G Real Estate Kevin Mofid, Research Director – Savills CB: The good news is that we’re seeing healthy yields and rental growth on industrial space, particularly in the Greater London area – but is this mainly because so much of it has vanished in the past decade? AH: The pressure on land for industrial and urban logistics is immense, particularly in areas of population concentration where developers like Segro are competing with house builders. According to the GLA, around 700 ha of industrial land has been lost in Greater London as places like Nine Elms, Old Oak Common and the Olympic Park ha ve become residential areas. That’s the equivalent of seven times the size of Regent’s Park – it’s gone and it won’t be replaced. KM: Since 2009, Savills research shows the supply of existing warehousing stock has decreased by 70 per cent. But at the same time, take-up has risen from a long-running average of 18m sq ft per year to 22m sq ft in the...

Yardi Think Tank Dec11

Yardi Think Tank

The fifth in Yardi’s series of thought leadership Think Tanks, held in association with Property Week, brought together retail centre owners and managers to discuss their experience and opinions on how to remain successful in a competitive retail environment. London’s retail scene is arguably the best in the world, with billions of pounds spent annually in the capital’s designer stores, boutiques and big-brand outlets. But as fashions in real estate strategy change, today’s retail landlords and property managers must move with the times to keep on attracting consumers. In a series of real estate think tanks, Yardi brought together a panel of retail experts to discuss the burning issues. Jace Tyrrell, deputy chief executive, New West End Company Jordan Jeffery, head of retail management, JLL Robin Dobson, director of retail development, Hammerson Clare Harris, head of group marketing & communications, Shaftesbury Chair: Claer Barrett, Financial Times CB: Let’s start by talking about online retail – have retailers and landlords passed ‘peak disruption’? RD: If you look back 10 years, the property industry was scared; now, I think we’ve come through the eclipse. The opportunity to create the best physical stores is complimentary to the drive to online. ICSC research showed that 90% of transactions still happen in a physical location – customers may have seen the product in a store, then ordered it at home or on a screen, or they might have ordered it at home and gone into the store to collect it. John Lewis recently reported that 50% of its in-store sales are coming from ‘click and collect’. As landlords, we create the platform for others to create the theatre. JJ: Everyone has had to adapt to online changes. Today’s consumers are much more informed and do a lot more research...