Key takeaways from the 2020 edition of Driving Growth & Investment in Build to Rent conference
By Simon James, Executive General Manager Sales and Marketing, WINconnect
It was an honour to be invited to speak at the 2020 edition of Driving Growth & Investment in Build to Rent conference last week.
As the Build to Rent (BTR) model continues to gain pace in Australia, the event provided a timely platform for global players to come together to discuss potential opportunities and challenges and uncover ways to add value to the Australian BTR marketplace. Here are my top takeaways from the two-day event.
- Choose the right location
“Location, location, location” is the mantra for success in real estate and the BTR sector is no exception. Due to rising property prices, renting is fast becoming the preferred lifestyle choice for city dwellers as they opt for greater flexibility and affordability, all while being able to live close to the city centre. Therefore, the BTR sector is more competitive than ever. To secure tenants in a crowded market, BTR developers need to offer options in the right locations that are close to areas of employment, easily accessible by public transport and near cafes, restaurants and other forms of entertainment.
- BTR developments must be sustainable
There is a growing appreciation for sustainability today and tighter regulations on buildings’ energy consumption have spurred the construction of eco-friendly housing options. In a recent survey WINconnect conducted with 50,000 of our residential customers nationwide, green power and electric vehicle charging stations topped the list for sustainability solutions owners and tenants would like to see in their apartment buildings.
However, it is often difficult for apartment owners, residents, building and strata managers to take the steps to reduce harmful carbon emissions – which is where WINconnect comes in. To date, we have provided solar panels to over 400 buildings and currently have the capacity to generate 500kw of solar energy – with another 500kw in the pipeline. As we enter a new era of housing, we are excited by the new opportunities and value community energy networks can add to green BTR developments.
- Customer experience is at the heart of BTR offerings
A key differentiator of the BTR model can be summarised in one word – service. In order to encourage longer tenancies, which will in turn minimise voids and loss of rental income, developers actively try to anticipate and address tenants’ needs across all aspects of their stay. This is a stark contrast from the traditional build to sell model, which is tailored with the end property owner or investor in mind.
For instance, tenants are provided superior maintenance services and enjoy the convenience of unified management with people on-site attending to their requests. Delivering such bespoke services will go a long way in building loyalty as tenants increasingly look toward developments that can provide greater value for money. This includes prompt responses to their queries and complaints, and developers need to ensure that third-party vendors are well-equipped to provide the same level of service – an area that WINconnect prides ourselves on. With a complaint rate of less than one per 1,000 accounts, we are confident of our capabilities in delivering a satisfactory outcome to all customers.
In addition, one of the most attractive elements of a BTR product to young professionals, who are fast becoming a core target group for developers, is access to high quality social spaces where they can meet and interact with the community. Open green areas and communal leisure spaces not only provide benefits to residents; building owners can also generate additional income from these add-on facilities.
- Local investors need to come to the party to support our growing BTR industry
While the BTR market in Australia has attracted significant interest across the real estate industry, only a small number of developers – largely from overseas – have committed to projects and foreign funds continue to dominate the market. Nonetheless, there is still potential for the sector to grow organically in the next decade.
Australian super funds and other local finance companies have been paying attention to the emerging sector in recent years, and we anticipate that they will likely get involved once success has been demonstrated. The data generated from ongoing projects, such as predicted yields and expenditure, will also assist them to better understand the BTR sector.
- Australia can learn from developed BTR markets around the world
The growth potential of Australia’s BTR sector is huge, but it has yet to take off and continues to lag behind several international markets. The UK, for instance, has seen steady growth in its BTR sector over the past decade and such developments now account for one-third of all new housing starts.
While significant differences do exist between foreign markets and Australia, we need to acknowledge that there are lessons to be learnt from these successful case studies. This year’s conference brought together expert speakers from the UK and US, and through our discussion, we were able to better understand the market factors that contributed to the success of international BTR developments and the changes needed in Australia to emulate their results.
The third Driving Growth & Investment in Build to Rent conference has been a real eye-opener and an amazing opportunity for attendees to get involved in this exciting industry. I look forward to seeing the growth of Australia’s BTR sector over the next few years and how WINconnect can provide a unique differentiation to developments through smart and sustainable utility services.