Q&A – housing digitisation, women in property and the future of short-lets

4 June 2021 | Investment

Can you tell us a bit about AltoVita and why it’s a disruptive platform?

AltoVita is an enterprise software solution for the global corporate housing sector, providing a cloud-based bridge between the highly fragmented property markets and multinational companies for extended stay requirements: project assignments, client engagements and relocation.   

The corporate housing sector is one of the few large markets remaining that has yet to be digitised. The processes are largely manual, requiring travel and mobility managers to copy and paste, reformat and use PDF and spreadsheets as their daily tools. 

AltoVita delivers global, live inventories with a focus on duty of care, at scale. Our system easily integrates with the relocation/travel management system on the demand side and the property management system on the supply side.

This creates a seamless flow of information from hospitality operator to employees, eliminating any opportunity for human error or manual work and delivering a better-quality service to our clients. 

How does it enable property investors to market their properties to corporate buyers on mid-term leases?

AltoVita integrates with many property management systems. As such, property investors who use certain PMSs can swiftly connect and market their properties with AltoVita.

For those who do not use a PMS, AltoVita has developed a proprietary property management tool which allows property investors to distribute their properties with AltoVita. 

Before being onboarded to the AltoVita platform, all properties must go through a meticulous two-tier quality control process, a thorough due diligence on both operator and property levels. This ensures compliance to our important duty of care and quality standards across the platform for corporate clients. 

AltoVita is headquartered in London with offices in Singapore and Dallas, Texas. 

You are an experienced investor yourself – how can property investors build asset-light businesses to grow and expand?

The property distribution market is still highly fragmented. There is great opportunity in streamlining the booking process from the property management systems all the way through to guest experience technology with smart distribution systems.  

This fragmentation means that having open APIs is becoming even more important, removing manual work from one system to another. Data can be shared across platforms, creating a more open technology environment and using tech to innovate and automate behind-the-scenes processes.

From a hospitality and extended stay perspective, there is a trend toward a digital-first experience once guests are in the property. Mobile apps don’t only offer contactless entry to the unit but also integrate with room service, in-room activities, and on-property activities like booking a spa or a gym visit.

Diversification is key in the evolution of the property management and the distribution system.  Flexibility around time can be a huge driver for the future of distribution technology.

Now, rooms can be booked by the hour and even by the minute – not just by the night or by the number of beds. This allows guests to make a reservation to work from a property during the day, or have a quiet space to take an important webinar meeting – and owners and management companies can diversify their business accordingly. 

What do you see as the trends for residential investment in the next five years? Have these been affected by Covid?

Real estate investment actually grew in the last year, despite the pandemic. There is particularly high interest in the multifamily (Build to Rent), extended stay, and co-living sectors. This follows a drop in demand for both studios and hotel rooms.

Residential investment backed by flexible rental terms are increasingly in high demand, driven by the work-from-anywhere trend. Investors are recognising the potential rewards in flexible living accommodation options and are pivoting their portfolios towards this trend.

Flexible spaces with multiple uses are key to future hospitality design and residential investment. This applies to both apartments and communal areas. We will see more of this type of innovation in the next few years.

There is also an urgent need for flexible, modular building design where studios can be converted into larger two or three-bedroom units. Once again, ‘flexible’ is the buzzword here.  

Communal areas are becoming neighbourhood hubs rather than exclusive spaces for guests, with F&B areas and workspaces offering a range of uses during the day.

A recent article suggested that females make better investors than men – would you agree?

One of the female investor traits suggested by the article is they tend to have longer investment horizons – looking farther into the future. A strong and healthy balance sheet as well as well-balanced risk management skills are essential to prolong investment horizons, in my experience. 

Emerging markets real estate investment, while it comes with currency and inflation risks as well as convoluted regulatory landscape, can fetch attractive yields. A study by the McKinsey Global Institute highlights the importance of emerging markets in the future with 440 emerging cities delivering close to half of global GDP growth. 

What plays a pivotal role here as well, in my view, is the ability to hold the investment for a longer time. 

It was my mother who taught me how to strategically deploy capital and invest in distressed real estate assets. She was an excellent real estate investor who was able to sniff out undervalued assets that will outperform. One of her projects in Indonesia was a large commercial site which was held for over 20 years, returning an IRR of 88%.  

There are other traits that come into play when it comes to real estate investment, such as culture and mindset, local regulation knowledge and the objective of capital preservation vs. quick gain.

Have you faced any barriers in your career or with your investments because of your gender?

As I went to an all-girls boarding school, Methodist Ladies College, in Perth, Australia, and university in Ann Arbor, Michigan, the early development of my academic history was less gender-biased and was based more on meritocracy. 

My mother, who played a major role in shaping who I am today, was a strong role model. So, the notion that women are the weaker sex was not part of my upbringing.

Gender barrier was a relatively novel concept that I discovered later on in my career, in Hong Kong, China and Japan, where I found gender inequality to be more prominent. According to the World Economic Forum’s (WEF) Gender Gap Index, China and Japan rank 103rd and 110th, respectively, compared to the UK and the US, which rank 15th and 51st respectively.  

Prior to co-founding AltoVita, I was in real estate portfolio management for eight years and my role intertwined with finance and the operational management of the assets. My investment portfolio consisted of largely residential assets, but also complex Commercial Real Estate (CRE), which is a predominantly male-dominated industry. 

In the United States, men make up 65% of the CRE workforce, and this discrepancy parallels other countries. The UK government performed a gender pay gap analysis in 2018 which indicates that women in CRE experience a 27% pay gap, almost twice as the average gap of 14%.    

My experience was much more strenuous in these complex CRE vs. residential real estate assets, from planning permission, sales & letting, construction and all the way to financial and tenant management. 

I do believe that gender barriers come into play and that there is a desperate need towards stronger ecosystem and mentorship programs for women in CRE. 

How will the short-let market fare in the next decade?

According to AltoVita’s recent interviews with 13 global mobility managers in partnership with Benivo, before the pandemic, 1 or 2% of a multinational company’s employees were expats. But now, that landscape has changed entirely with the rise in work-from-anywhere (WFA) and virtual assignments.

This unlocks the opportunity for more remote work, which means that now maybe 20-30% of a company’s workforce could be mobile employees. That’s a big shift.

The interviews represent a myriad of industries and unique perspectives, including IT, FMCG, Automotive, Media & Finance, Semiconductors, Mining, Research, and Food & Agriculture.

As a larger percentage of employees will be WFA, this could increase the demand for flexible rentals. Backed by a strong demand for flexible rentals, short-term rentals will fare well in the next decade. 

In our survey during Innovation Summit Design Thinking attended by 400-plus participants, 68% of participants believe a monthly lease structure is most appropriate to support WFA, dropping down to just 25% preferring a weekly lease, and 7% favouring an annual lease. 

This suggests that the short and mid-let markets are here to stay, but lease flexibility is paramount. 

This post has originally been featured in Property Investor Today.