Welcome back to the UK Build to Rent Q&A series. Last week we launched with our inaugural post featuring Freddie Wonnacott from M&G. The Q&A focused on investment in the BTR market. If you missed it, you can read it here. This week we’re back again with Freddie covering the topic of design in Build To Rent.
M&G Real Estate is a leading financial solutions provider for global real estate investors with £33 billion in assets under management. It has a sector leading approach to responsible property management and is committed to continuously improving the sustainability performance of its funds.
About
Freddie Wonnacott, Associate Director at M&G Real Estate. Freddie is an investment manager specialising in residential & student accommodation in the UK.
Q: What is the most overlooked or under designed aspect of a BTR development and what can you tell us about why it has such importance?
A: The focus of design is normally on apartment layouts and the creation of fantastic amenity spaces.
As important as these features are, the ‘nitty gritty’ aspects of property management are often overlooked.
For example, we ensure post rooms are correctly sized and the parcel strategy is thought through properly. We review the access strategy, CCTV layout and access control to avoid unnecessary security costs. We want our onsite team to create and enjoy pleasant working environments, which ultimately helps with staff retention. Sufficient storage is also a must so we can hold stock onsite for speedy maintenance repairs.
These factors combine to improve efficiencies and overall performance.
Q: If you could recommend 1-3 developments for someone to visit that would provide a masterclass in BTR best practice design – which would they be and what makes them so unique?
A: There is no ‘perfectly designed scheme’. We have learned an awful lot in terms of design during the last seven years and pride ourselves on continuous improvement and have built upon those learnings for the schemes we are currently developing.
In terms of the latest completed developments, we are very proud of The High Line in Poplar, London. Developed by Telford Homes, it boasts a wonderful sky lounge and gym with amazing views of the city.
We’d also encourage people to visit our first suburban scheme, The Green, near Crawley in Sussex, which includes various community-led amenities such as a multi-use games area and multifunctional ‘village hall’ space, as well as gym and residents lounge.
We expect we will continue to invest in more suburban schemes as occupiers increasingly value open space in conjunction with our continued investment in the urban locations that have formed the mainstay of our activity to date.
Q: Without mentioning Amenity space – what do you think we will see as defining features of a BTR’s unique selling point once the sector has reached further maturity in areas of steep BTR competition?
A: Yes, it’s important to have the right building blocks with high quality accommodation and good ‘fit for purpose’ amenity spaces in the right location, but these are almost already prerequisites today.
Our strong belief is that quality service will be the defining factor for the future success of a scheme.
We put huge focus on property/asset management and customer service, which is why so many of the staff on site are from a hospitality background with a customer-centric focus.
In our mind, demonstrating that we are professional and caring landlord is just as – if not more important – than a snazzy amenity space.
Q: Often development designs need to be scaled back to achieve better financial metrics. What is the most difficult part of creating a BTR development that both meets the tenants needs & investors budget & how do you ensure you reach that balance?
A: Often we will engage when a scheme is at Stage 2 RIBA design (either has planning permission or is submitted for planning) and while we are increasingly seeing schemes designed for rental, many of the opportunities are still build for sale products requiring changes to suit us as a long term owner-investor for a rental product.
Given the relatively late stage of involvement, it can be a challenge to incorporate our requirements. Ultimately, there is a trade off in terms of additional cost and so the key is to be clear from the outset with the counterparty regarding the minimum requirements (in terms of overall design, specification general arrangements etc), thus avoiding additional costs when trying to incorporate them at a later stage.
Q: What has been your biggest lesson in BTR design over your career?
A: Recognising the dynamic nature of the design evolution and the huge benefits of learning from our operational assets.
With now c. 2,000 live units and a further c. 1,500 under construction, it’s great to review what works well operationally and what can be further refined and incorporate this into the future developments in a constant feedback loop.
Q: Just because it’s such a hot topic – to rubbish chute or not to rubbish chute?
A: It depends on the scheme. We don’t typically install them as they can cause additional maintenance issues especially if improperly used.
That being said, there are merits to occupiers not having to take their smelly rubbish down in the lift with them! They do work better in taller buildings where obviously there are greater efficiencies across a single core.
That marks our two part Q&A with Freddie Wonnacott. We are very grateful to both M&G & Freddie for providing us with their time and contributing to the successful launch of this series. Thank you!
Join us next Monday for our first management Q&A.
UK Build to Rent Team
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