PlaceTech Talks Residential | Keeping up with pickier tenants
How can proptech help developers keep track of the moving parts in the rapidly-evolving residential market?
Sponsored by Mallcomm, Bruntwood Works and Morgan Sindall Construction and hosted by Dan Hughes, founder of Alpha Property Insight, PlaceTech’s latest event looked at trends in a fast-moving market still struggling with issues of affordability and meeting demand, not to mention the stresses of the Covid pandemic.
- Tomer Bercoviz, founder, Vonder
- Honor Barratt, managing director, Birchgrove
- Jo Winchester, executive director, CBRE
- Anthony Breach, senior analyst, Centre for Cities
Key points were made in the first panel session around how markets have been affected by Covid, and what the industry has done in response.
Jo Winchester said the residential sector is leading the way: “Over the last five years, the purpose-built student accommodation market has matured, although most cities still have headroom.
“The co-living market is still new, but there’s definitely a gap in the market for single-person, well designed homes. People want professionally managed accommodation, with large social spaces. However, the planning side of it is still massively challenging.
“Generally speaking, the ‘bed sectors’ – students, co-living, retirement living – are at the forefront of ESG, ahead of the mainstream commercial buildings, largely because we’re usually creating new products to modern standards.
“Using tech for the social side, I know of one operator with an app tracking movements – which areas of the building are used and when, helping refine future designs. And there are things like contactless locking systems that are ideal for a pandemic environment.”
Anthony Breach said: “There are some trends that contradict the ‘everybody’s fleeing the city’ Covid narrative. Airbnb lets are holding up, compared to hotels. Some people in house shares in cities are moving out, they don’t want to commit long term, so agree monthly rolling contracts before moving back. It suggests the fundamental appeal of cities is unchanged.
“In London rentals, pricing has fallen sharply in larger properties – people are desperate to get out of house-shares. Could this lead to a more professionalised market segment? Smaller one-beds might be the missing piece of puzzle in urban resi.
“Digitisation can help is moving the Local Plan process on, away from a random checklist of contradictory policies to a map-based approach, making clear what’s a development area and what is protected. Digital can enable a more rules-based and less confrontational system that works faster and is hopefully more affordable.”
Tomer Bercoviz said: “People need communities and especially after lockdown periods we’ve seen people looking for the social experience of co-living, using shared spaces in a safer way. People are looking for safe, flexible housing experiences that can include their work needs too. They’re willing to spend more on housing to get the most comfortable experience they can. We’d like to see more co-living and BTR in neighbourhoods: people now release they don’t need to be in city centres, so reflect that.
“For us, there are three key tech areas with the tech: property management systems, an app that gives our customers social, safe interaction and organisational info in a one-stop shop, with everything GDPR compliant. The third thing is the Net Promoter Score, which aids feedback and our ongoing improvement.
Unsurprisingly, the last year has seen a lot of activity around senior living. Honor Barratt said: “We’ve seen a lot of crisis-stricken people making contact, desperate not to be stuck alone during lockdowns. I’m still unsure as to whether the stress of all this will have an ongoing impact for the sector.
“Covid has fundamentally changed the way we manage buildings. At this home, we’ve now got two members of staff acting as surrogate daughters: people still need their kids to do stuff and be their advocates. That’s two job roles that didn’t exist last year, they’re now our busiest people.
“The pandemic has forced us to adopt tech that would have taken us years: we’ve now got an app as we previously couldn’t communicate with all the families instantly. It tells me all the activities everybody’s doing. We also now have systems to make sure everything’s done to keep up to speed with cleaning requirements.”
Barratt concluded: “As a country we’re not doing enough to plan for an ageing population, but there is a wall of money ready to pile into senior living, we could triple our activity if we had the resource.”
- Gonzalo Marquesini, founder, RenKap
- Jim Eaton-Terry, chief technology officer, Quintain
- Jamie Campbell, co-founder and chief executive, Fronted
- Samantha Kempe, co-founder, IMMO Capital
Should investment follow, better use of tech could see a million more homes brought forward, our second panel heard.
Gonzalo Marquesini’s business is looking to help expedite brownfield development at publicly-owned sites. He said:
“The UK aims to build 300,000 homes a year, knows there’s demand for 340,000, but is only delivering 180,000. What other industry has such a gap constantly unmet?
“Data can help, but there are huge problems: local authorities don’t always know what they own and what can be developed. We identify sites, do investigations and feasibility. We can get to an answer on what can be developed, and what might be better sold to the private sector, much faster and with fewer consultancy fees.
“Everyone knows there’s a massive amount of underused brownfield land, and the larger sites understandably get the focus. We’re helping make those small sites, of 20 to 40 homes, feasible. There is enough under-used land in the UK to deliver 1m homes and cover six years of unmet demand.”
Jim Eaton-Terry said: “Property can be slow on data-sharing, but in development and construction, things have evolved in the last few years, with BIM and more data in the acquisitions pipeline. With other businesses, there’s less maturity.”
Eaton-Terry reckons the difference in mindset between property and tech types still needs to be reduced: “One issue is that property people are used to huge projects, rather than starting out and constantly incremental improvements. It’s not necessarily that we don’t have the right people, it’s about structure and environment to do those things.
“If you automatically think something will cost thousands, you’ll never do it: the tech mindset is trying a few tech licenses where some might work and some won’t, but it’s not been a part of real estate culture.
“One of the bigger impacts of Covid on our developments is to look at how we build community engagement processes in a virtual way, something we think will be of value into the future. We’ll look to blend enhanced-quality online viewing with live viewings in future.”
Sam Kempe agreed that culture change is key: “There aren’t enough tech people in real estate companies, and big property companies getting people in with a data-first mindset is one of the biggest challenges we have. It needs more people embedded to be champions, insisting every single decision is data-driven.”
She also said that with an eye on ESG, institutions long-focused on new build are now turning their attentions to existing housing: “Carbon emissions are a concern to investors, and 10% of UK emissions being related to construction is a concern. ESG is moving from box-ticking to a fundamental component of investor decision-making.
“Several investors are now interested in existing housing stock, recycling it to make it fit for purpose. Single family residential is very popular as an asset class in the US, and we can see it here with deals such as Goldman Sachs’ purchase of a large portfolio in January.”
Kempe added: “On the lettings side, things have moved on quickly with 360-degree virtual tours and a fully digitised rental process, and we’re now seeing different parts of the value chain use the same virtual tour rather than repeat the process. People have been forced to adapt, and that opens up so many opportunities in an often-archaic industry.”
Jamie Campbell said: “We’re trying to build solutions for renters and overcome that issue of the cost of moving, it’s a system built on the concept of open banking and data-sharing. What’s interesting to us is how we broaden the access of data to make a great customer experience, with integrated services.
“We want to make more impact so that renters are not the bottom of food chain – tenants in general have been hard hit, the most likely to be furloughed, or not able to work from home, or have local green space. Empowering the renter has required a really well priced credit product that we believe increases velocity in the market, freeing up a bunch of people otherwise unable to move.
From what Campbell says, it seems quality of rented product should improve: “What we’ve seen happen is that people are empowered because they get their approval and become pickier about their move.”
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