COMMENT When Argent Related launched its BTR vision with plans for a project at King’s Cross this week, my initial reaction was: “Perfect timing.”
One of the country’s most highly regarded developers unveiling its first BTR scheme, just days before EG goes to press with its first BTR special. You couldn’t make it up.
But if it hadn’t been Argent Related, it would likely have been someone else grabbing the headlines. After all, last week it was Realstar revealing plans to expand its BTR platform Uncle globally. Next week, it will probably be another investor – maybe Hestia and its packed pipeline.
That’s not to dismiss the ambitions of Argent Related’s £2bn BTR proposals. I’m just saying, this is no coincidence, it’s a trend.
That trend has seen almost £5bn in investment over a year of lockdown , with developers lining up a further £11bn. Commercial investment has dropped, but in the wake of the pandemic all eyes are on residential.
At EG, we want our data to create benchmarks for the industry and promote a greater appreciation of a sector that is still often misunderstood.
BTR is not necessarily peaking because it is replacing the office. But it is a maturing asset class that is resilient under economic pressure – if those stats above aren’t evidence enough, check out listed landlord Grainger’s performance over the last six months and chief executive Helen Gordon’s views on the investment market.
Yes, there will be challenges. The landscape is changing and the industry will need to engage with government on issues such as tenancy reform. But that doesn’t have to be a stumbling block. As Aberdeen Standard Investment’s Ed Crockett puts it: “Change is coming to the UK residential rental market and it is time to embrace the opportunity.” Perfect timing, in fact.
A year in lockdown
Investment into build-to-rent has doubled over the past 12 months to almost £5bn, with a further £11bn added to the development pipeline. In this first in-depth Radius analysis, EG reveals the scale of investment, the areas attracting capital and speaks to the companies behind the biggest schemes.
Argent Related unveils a £2bn BTR pipeline
Argent Related is launching its first BTR scheme at the Triangle Site in King’s Cross as part of a £2bn pipeline. As the developer hunts £300m in investment for future schemes, Tom Goodall, partner and head of residential shares his BTR strategy. “We have no upper limit of where we would like to take this,” says Goodall.
Inside BTR’s £5bn bumper year
As fears for the future of the office and ailing high streets grow, the case for residential investment has never been stronger. While a year of lockdown saw transactions in most areas of commercial real estate put on ice, investment in the UK’s burgeoning build-to-rent sector doubled to £4.7bn. EG Radius recorded 48 completed deals in the 12 months to the end of March, totalling 16,229 homes. Dig into the exclusive data here.
Profile: Home is where the hearth
With Federated Hermes’ BTR quest for sustainable income finally coming to fruition, fund director Will Gibby talks to EG about the expansion of the Hestia platform. After entering the market in 2014, the investor has shifted gears with a string of deals, a new operating platform and a goal to deploy £1bn in two to three years.
Grainger’s Gordon on investor appetite in the BTR boom
Grainger has taken advantage of new investor appetite for BTR with a surge of disposals as part of its asset recycling strategy. For many commercial real estate executives, such an uplift in activity might seem an odd move – who would choose to sell in a downturn? But Grainger chief executive Helen Gordon says stable performance and fresh popularity for BTR has seen a range of buyers chasing investment opportunities.
Skyscrapers and shopping centres: BTR’s £11bn lockdown boom
BTR developers pushed ahead with pipelines even during the depths of Covid-19, with the market hitting a record for applications, homes and height.
Plans for 38,533 homes across 98 developments were submitted across Great Britain in the 12 months to the end of March – 53% more than a year earlier, according to EG Radius. The total is more than double that of just two years ago, driven by developers pitching larger schemes, including new skyscrapers and major regenerations across the country. EG investigates the key markets, major players and type of schemes in the pipeline.
Comment: Smaller schemes could bring a fresh wave of investors into BTR
BTR schemes are getting bigger. Figures from EG Radius show the average scheme size has risen to almost 400 homes, up from 100 in the early days. With established funds and developers concentrating on larger schemes, the door is open for more diverse investors to join the market at the smaller end of the scale, writes Katherine Rose, head of BTR and PRS at Navana Property Group.
Comment: The case for regulatory change in the private rented sector
Tucked away on page 113 of the recent Queen’s Speech and ignored by many mainstream commentators was a short but focused note committing the government to take forward regulatory reforms to the residential rental market.
While it did not generate the column inches dedicated to discussions on planning reform, it is arguable that the proposed changes could be more radical and far reaching than any of the other property related changes or, indeed, any of the 30 laws intended to be passed by ministers this year, writes Ed Crockett, head of UK residential investment at Aberdeen Standard Investments.
Suburban BTR grows as London slows
A recent surge of investor backing for suburban build-to-rent assets has seen the market swell to 13,884 homes, accounting for 7% of the sector.
New figures from the British Property Federation and Savills identify some 5,139 completed SBTR homes, 3,449 under construction and a further 5,296 in planning.
SBTR has helped boost the wider sector growth, rising to 188,456 homes at the end of March.
Comment: How to get BTR firing on all cylinders
Build-to-rent is transforming what it means to rent in the UK – providing stability and more choice for renters, as well as the highest quality of design, services and facilities – and the sector’s role in creating a more diverse and competitive housing market is only set to grow.
The housing supply-demand imbalance remains acute in the UK, meaning that we must ensure we don’t take our foot off the pedal. Every housing sector must be firing on all cylinders, writes Ian Fletcher, director of real estate policy at the British Property Federation.
The EG Interview: Realstar’s Ryan Prince on building a business from BTR
Build-to-rent is not a business in the UK, says Ryan Prince. There is no template, no equivalent to Whitbread spewing out thousands of hotel rooms. There is no strategy for scale. Instead, it is all about the deal.
Luckily for Canadian investor Realstar, vice chairman Prince has closed enough of those deals to grow a £1.5bn rental portfolio and establish the operational platform Uncle.
Now, he is looking to double Uncle’s UK portfolio and expand globally. EG met Prince at the developer’s 45-storey landmark Highpoint scheme in Elephant & Castle, London’s tallest BTR tower, to understand its deals and hear his story.
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