The fast-growing Build to Rent (BTR) sector continues to generate plenty of news, even as we live through Lockdown 2.0.
The week-long virtual Festival of BTR is currently underway, run by BTR trade body UKAA, highlighting the sector’s growing prominence in the private rented sector.
Here, we zone in on the latest BTR news from across the country.
New hire for major BTR operator
The Irish arm of Quintain – a large-scale BTR developer – has appointed Donal Courtney as its Multifamily Specialist.
Courtney joins Quintain Ireland after spending two years exclusively advising on PRS/BTR development and investment. He is a qualified accountant and surveyor with six years’ experience with KPMG and Knight Frank.
The search was facilitated by deverellsmith’s manager of investment, Hannah Taylor, during the initial nationwide 2020 lockdown.
Along with the Quintain team, Courtney will work directly on the development sites to ‘create best in class BTR property operations, BTR products across the existing portfolio and deliver ground-breaking developments’.
“I am excited to join the talented Quintain team and eager to begin working to deliver the firm’s large-scale residential developments,” he commented.
Michael Hynes, managing partner at Quintain Ireland, commented: “We are delighted to have Donal join the team. I’m happy to say that this skillset is difficult to find in the market because it is a shallow pool and we were delighted with deverellsmith’s assistance and commitment in finding the right person for us.”
Mental health support during second lockdown
Well-known BTR brand Moda Living has announced a partnership with health-tech company MYNDUP to offer residents across its £2.5 billion portfolio of ‘Next Generation Neighbourhoods’ access to mental health support during the lockdown and beyond.
The firm says this is the latest in a suite of innovative partnerships – which include hero, Canopy, Selfridges and Utopi – rolled out by housing brand to ensure that its residents’ health and wellbeing ‘always remains at the forefront’.
Joel Gujral, MYNDUP founder, launched the service in February 2020 following his own battle with mental health after an undiagnosed illness. Following months looking for the right practitioner to help him heal, he came to understand that everyone has different needs when it comes to combatting mental health concerns, and a ‘one size fits all’ approach just wasn’t going to cut it.
Although the wider impacts on mental health from Covid have not yet been fully addressed, clinical anxiety increased by more than 30% in February and March this year (MHA, 2020), with experts anticipating continued adverse effects globally, including heightened stress and anxiety, isolation, loneliness, blurring boundaries of life and work, restricted access to medical support and uncertainty around the future.
Oscar Brooks, director of brand at Moda Living, said: “The health and wellbeing of our residents has always been a core focus – we want to provide the happiest, healthiest and socially connected neighbourhoods in the UK. We are seeing it reported that lockdown is having a major impact on mental health, but even seeking help can feel overwhelming.”
He added: “Our partnership with MYNDUP turns the stressful process of researching the right practitioner into a few clicks. Moda residents can take advantage of live, virtual 1-1 sessions across the mental health spectrum, all subsidised by us.”
Joel Gujral said: “We are delighted to share MYNDUP with Moda’s residents and are confident that whatever they are battling, we can help. Our three-step solution is incredibly simple and involves telling MYNDUP how you’re feeling, choosing a time and practitioner, and beginning your session via secure, encrypted video.”
The partnership has been deployed initially at the 466-home Moda Angel Gardens in Manchester, the Moda Living portfolio’s flagship development, funded by investment partner Apache Capital.
Ascend ensures rents keep coming in
Sticking with Manchester, specialist BTR firm Ascend – based in the city – says it has collected 99% of all invoiced rents for its customers during the coronavirus crisis by adopting a hands-on, flexible approach with residents.
The Manchester-based company has reported the figures from the period January-September 2020, which includes the six months of national lockdown in response to Covid-19. The industry average for rent collection has been 95%.
Ascend collected nearly all rent owed on its growing national portfolio of BTR schemes during this period. Its portfolio is made up of two to four-bedroom apartments and houses in developments ranging from 50 to 100 properties.
To ensure such a high level of rent collection, Ascend has worked closely with its residents throughout the pandemic to ease their concerns and provide individuals and families with flexible terms where required.
To this end, the firm agreed payment plans with the people worst affected and then worked closely with residents to get their payments back up-to-date.
Ged McPartlin, managing director of Ascend, said: “We all know how tough this year has been for many people, without adding housing worries into the mix. We understand just how vital it is to provide high-quality rental homes in the areas where they’re most needed – and to protect those renters who might require extra support from time to time.”
He added: “By putting our residents’ individual circumstances first and being flexible in our approach, we’ve worked hard to collect almost all invoiced rent. This is testament to our track record as a leading BTR specialist; our knowledge of the sector and what people need from an agent, especially at difficult times.”
Ascend’s BTR clients include Gatehouse Bank, Live DifRent, Sigma Capital Group and Simple Life. In order to support its ongoing growth, Ascend has added over 20 people to its BTR team in 2020 and intends to expand the team by a further 50 in 2021.
L&G announces new suburban BTR arm
Another major player in the sector, Legal & General, has announced the launch of its new Suburban Build to Rent (SBTR) business, which will aim to develop large-scale ‘single family’ rental communities in suburban locations across the UK.
The new housing arm will partner with UK housebuilders and undertake a direct delivery programme ‘to bring forward over 1,000 homes each year from 2024’.
As an investment market which is expected to grow to in excess of £200 billion, Legal & General is aiming to be the UK’s first choice SBTR platform, creating much-needed, high-quality family homes in areas connected to schools, transport infrastructure and key amenities.
The operational UK BTR market was valued at around £10 billion in 2019, but is one of the fastest-growing parts of the marketplace and continues to attract considerable institutional investment. The market is expected to bounce back well next year from the impacts of Covid-19, with many seeing this part of the PRS as something of a safe haven.
Legal & General has long been one of its most high-profile operators. Having launched its Build to Rent Fund in 2017, it currently has over 5,000 homes in operation or development across the UK’s major towns and cities.
That said, the SBTR sector has, by contrast, lacked the same concentrations of institutional investment, with less than 1% of the market having benefitted from ‘patient capital investment’ compared to approximately 6% for the urban sector.
The company’s SBTR arm is being headed up by Simon Century, who has led the investment and scale up of a number of major housing businesses. He will be supported by David Reid, who will act as managing director of the new business, having joined Legal & General from Rowan Asset Management in January 2020. The wider SBTR team is now also being established.
Nigel Wilson, chief executive of Legal & General, said: “As we prepare for economic recovery, businesses like ours must continue to invest in our future. In light of the pandemic, it is more important than ever that we deliver the houses that our society needs to address structural shortages across every dimension of the market. We are still falling far short of the over 300,000 new homes needed each year.”
David Reid added: “Build to Rent as a sector has consistently demonstrated value to investors, delivering robust and defensive income streams, suitable for patient capital investment. It has shown significant resilience throughout the current crisis with strong rental collection and occupancy rates. With working practises and demands changing rapidly, this is an appropriate time to broaden Legal & General’s BTR investment, into the suburban single-family housing market.”
BTR brand Kooky invests big in Barnet
A new boutique BTR brand has announced the purchase of 69 units located in Mill Hill and Whetstone, amounting to a combined investment of over £33 million in the London Borough of Barnet.
Delivered by national housebuilder Taylor Wimpey, Kooky has purchased 30 units within Millbrook Park, in the wider redevelopment of the former Army Barracks in Mill Hill, and a block of 39 apartments within Oakleigh Grove, Whetstone.
Kooky’s investment holds the lease on all apartments for 999 years and each of the units will be developed to meet its brand-led designs; adapting the look and feel of each apartment to comply with customers’ wants and needs.
The 39 units in Oakleigh Grove have two bedrooms and two bathrooms, while the Millbrook Park former Army Barracks contain 12 one-bedroom apartments, 18 two-bedroom and two-bathroom apartments, as well as 71 parking spaces for residents.
Howard Crocker, managing director of Kooky, said of the latest acquisition: “Our strategy at Kooky is to be the most customer-focused property provider. We are on a never-ending quest to make the experience better for our consumers, constantly talking to them about what they want, and exploring options to help personalise Kooky experiences within our buildings.”
The London Borough of Barnet remains a sought-after area for professionals seeking to be within accessible distance of the capital thanks to its strong commuter links, with both the Northern Line and the M1 providing quick access to the centre of town.
According to the Greater London Authority (GLA), the population of the borough overall has risen from 329,100 to 400,000 in the space of two years; while Barnet was recently ranked by Rightmove at number three in the top 10 annual increases in rental searches in London.
Andy Holloway, land and planning director for Taylor Wimpey North Thames, said: “Kooky and its parent company Delph Property Group are a recognised name in the BTR market. All re-designs of apartments will be led by Kooky and we are excited and confident in their unique approach to completing these blocks in Mill Hill and Whetstone.”
Kooky’s latest two blocks in Barnet join its existing apartment blocks in High Wycombe and Staines. It’s now grown its total investment into properties around London to over £76 million in the space of only six months.
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