Why resident experience is more important than ever in Manchester’s build-to-rent market
Capital Markets director Lee Hill offers his thoughts on doing the basics brilliantly, the future of build-to-rent in Manchester and thinking outside the box to stand out in this crowded market.
Sprung from the American ‘multifamily’ style of renting, build-to-rent in the UK has exploded in popularity over the last seven years, and has made its presence firmly known across the north west.
Build-to-rent (BTR) schemes are designed and marketed specifically with renters in mind – none of the apartments go to market for sale individually, and typically the whole block is owned by a single property investor.
The style takes a cue from the hospitality industry, putting occupier (or ‘customer’, as they’re often referred to) satisfaction and amenity at the heart of a scheme. Residents can expect to find on-site gyms, communal lounge areas and concierges as standard, and the cost for these extras is included in their monthly rent.
JLL was one of the first managing agents to bring build-to-rent to the north west, having been appointed on LaSalle Investment Management’s landmark Greengate scheme, launched in the summer of 2016.
Greengate was the first taste of BTR for Manchester, and it has remained one of the most sought-after schemes since its arrival in the city, with occupancy levels currently at 96% and a high tenant retention rate.
Despite the increasing number of units in the region and the additional number being launched this year, our Manchester letting agency saw a 107% increase in the number of lets agreed this July compared with July 2018.
Happily, Greengate remains one of the leading BTR schemes in the region, and we believe that’s because we’ve committed to continually improving services for tenants since they moved in.
In such a crowded market, the only way to ensure you remain at the forefront is through genuinely listening to what your residents want and tailoring your offering around them.
As BTR living has become more and more commonplace, many operators have looked to ‘outdo’ one another by providing blocks with increasingly luxurious amenities. Whilst those facilities will undoubtedly make renters sit up and take notice, they become somewhat meaningless if the resident experience is lacking.
Doing the basics brilliantly
This applies to every area of the customer journey and is the reason why our client has had to consider city logistics as part of its occupier offer at Greengate.
It’s a symptom of a couple of things; firstly, the urban living renaissance Manchester is currently in the throes of, and secondly, the meteoric rise of online retail. The latter is one of the most under-considered factors when developments are being drawn up.
To put it into context, Greengate this year took over 29,000 parcels for residents, which puts a huge amount of pressure on the management team. Back in 2017, before it got to this level, we sourced and installed an automated parcel locker solution which allows us to efficiently deliver parcels to residents and alleviate some of this pressure.
Yes, it’s not the most glamorous thing in the world, but it’s imperative that you have infrastructure that works before you start placing the cherries on top.
Recruitment, recruitment, recruitment
The staff on the ground in BTR blocks are a core part of the customer experience, and many operators have been having a tough time recruiting the ‘right’ people.
Former estate agents or facilities managers don’t always have the correct skillset, as their roles haven’t historically been customer-facing enough. Instead, we’re finding that people with a hospitality or client-facing background are more suited to the roles we need to fulfil, as personality and customer management skills are the most important things.
The relative lack of talent can be linked to the fact that, outside of the property industry, many people still aren’t 100% clear on what BTR is; thus far, it’s only been brought to major cities in the UK, so there are still a lot of people
yet to encounter the model.
Building for the future
Whilst BTR might still be classed as emerging to many, it’s certainly taken the residential rental market by storm, particularly here in the north west.
It’s an interesting future ahead. There’s lots of new BTR product in the pipeline and a few different models coming out of the ground, including fragmented models which are run like a build-to-rent development but have more than one landlord. Everything that’s come out the ground in Manchester so far has been single ownership, so that will be a change of pace.
Looking beyond that; many BTR schemes in Manchester up to this point have predominantly been speculatively built by a developer, and then institutional investors have bought them upon completion – so it will be interesting to see how purpose-built BTR developments differ from those speculatively built for the sales market and then adapted for the rental market.
Ultimately, despite the residential property market getting ever-more crowded, it will always come back to quality. Quality, and understanding what your customer needs, will always ensure you stand out from the rest.