You won’t find Mark Allnutt on the real estate conference circuit. Back in 2013, before the co-head of Greystar Europe joined the business, he was a regular fixture; now he’s more likely to be found rubbing shoulders with residents in west London.
In the days when it was acceptable to call build-to-rent or multi-family “nascent”, Allnutt (pictured above) and a handful of first movers set about carving out a new industry. Almost a decade later, Greystar Europe has closed €14bn (£12bn) in transactions and expanded to seven countries with more than 30,000 homes. But still some pundits brand the sector as emerging.
“I can see why that is,” Allnutt says in an interview at Greystar’s Tillermans Court building at its Greenford Quay development. “Regardless of the bubble that we’re in and everything we’re doing, it is still only 2% of the housing stock in the UK that is institutionalised.
“When we’re leasing over a weekend, customers are coming in and seeing it for the first time, like ‘Wow, we didn’t realise you could have this’. I can understand why people feel that way. It probably is still like that from the outside looking in.”
And the offering is still evolving, Allnutt’s co-head, Angela Russell (also pictured above), adds. “Institutionally owned and managed resi in the US was not the way it is today 30 years ago,” she says. “That’s where [Greystar founder] Bob [Faith] saw his opportunity to come in and change the way the market, this asset class, actually operates.”
Since that launch in 1993, the business has built a finely tuned machine of 20,000 global employees. In Europe, while Allnutt is typically seen as the frontman of Greystar, leading on the investment and development strategy, Russell has grown a 650-strong company to deliver on that vision. As the BTR behemoth welcomes new customers to Greenford Quay, the UK’s largest rental scheme to date, EG tags along for a look behind the scenes.
Green shoots
The brick towers of Tillermans Court are visible from the Central Line on the approach to Greenford Quay Station. From the station, it’s a short walk to the former GlaxoSmithKline headquarters in the centre of Greenford.
The 27-acre site has been walled off for the best part of a century and derelict for the past decade. In 2015, Greystar decided to buy the land, paving the way for a 2,000-home project, including the largest purpose-built rental community in London and the company’s largest single scheme globally. But Allnutt insists Greenford was never a hard sell.
He recalls Faith, chief financial officer Derek Ramsey and executive managing director for global investment Wes Fuller visiting the site to see it first-hand with the team. “As soon as somebody walked the site, they would just get it – it was just clear and obvious,” Allnutt says.
There’s the HQ of Ferrero Rocher, the Grand Union Canal, a Crossrail spur at West Acton and a local authority that shared the same goal.
“Ealing needed more housing supply,” he adds. “Housebuilders building for sale are only going to build so many homes, social housing providers are only going to build so many. So how do you create the additional? Rental housing can provide that additional supply, especially if it’s funded by global institutional capital.”
Greystar and joint venture partner Ivanhoé Cambridge secured an untainted, detailed consent in just six months. “It was like, let’s just go all in,” says Allnutt. The 379-flat building went up in just 19 months using Tide Construction’s modular housing tools and completed in March 2020. Despite lockdown and rumours of a London exodus, it is already more than half-leased. For the rest of the wider site, “it’s just plug and play, every plot is ready to build on,” says Allnutt. He makes it sound easy, but this has been years in the making.
American hustle
Greystar Europe started in a Starbucks about a decade ago. “Back then it was a hustle. We were hurtling down the runway, building the plane, figuring it out as we went,” says Allnutt.
He joined the company in 2014, after more than six years at Thames Valley Housing Association, which saw him set up specialist BTR developer Fizzy Living. A year later, he was joined by Fuller, who relocated to London with a troop of directors, ready to put the Greystar plan into action.
In 2016, Russell joined from Primary Health Properties. By this time, Greystar had deployed more than £2bn in student accommodation and was preparing to launch its multi-family strategy from its new base in Great Winchester Street.
With the growth journey we’re about to go on, you can’t reinvent the wheel every single time. You need to have playbooks and ways of doing things
– Angela Russell
“When you are in that environment, you have to be innovative and creative about how you do things,” says Russell. She points to the 30-year-old business in the US as a comparison. “There are things that get ingrained in your day-to-day,” she adds. “When you have a new set of people who are thinking more strategically about how to get things done in their local markets, that’s how new ideas and ways of doing things are born.”
Russell is happy that the company has since progressed. “It feels good to actually be able to say, ‘we know how to do this now’. We don’t always have to reinvent the wheel,” she adds. “With the growth journey we’re about to go on, you can’t reinvent the wheel every single time. You need to have playbooks and ways of doing things.”
The Greystar playbook
Today, the tables have turned and it is the UK-based team working with a new and improved Greystar playbook. That playbook incorporates 80% Greystar know-how to decide on tenure length, amenity types and locations that work, with 20% localised, cultural or regulatory influence.
At Tillermans that translates to a cinema room, playroom, a 14th floor gym, rooftop lounge and bar and a pool table. A few days before my Greenford visit, I speak to Fuller, who has since returned to Greystar HQ in Charleston, South Carolina. He explains the 80:20 rule, hastily adding: “We’re not a company that’s sitting in the US, trying to develop a product in Europe. We’re a European business, with expertise in each of these local cities.”
Juan Acosta in Spain or Mark Kuijpers in the Netherlands might argue their teams are still in that start-up mindset, with the leaders donning a few different hats. While Acosta heads up Greystar’s newest market, he is also the lead on the recent €1bn value-add discretionary vehicle – Greystar’s first discretionary vehicle for Europe. Kuijpers is juggling leading one of Greystar’s most advanced markets and pioneering new initiatives in sustainability and technology.
In this way, expansion through Europe has delivered new learnings for the US. “When I landed in 2015, I think there was perhaps an arrogance that the US was going to import all of the great ideas,” says Fuller. “It has turned out to be very different. We are exporting experiences and ideas to Asia and the US, in significant quantity. It has made us a better business by being in business in Europe.”
One example of this is through Greystar’s use of MMC. “This innovation started in the UK,” says Fuller, highlighting the environmental benefits, the quality of product and the speed of delivery. “The construction industry could benefit from all of those things that this particular technology brings. We think there is a business opportunity in this type of construction in the US and we have started to investigate how Greystar could participate.”
Greystar Europe is also feeding the machine through day-to-day operations that create a feedback loop. Greenford’s speedy planning consent took around 80 employees and consultants, and every new purchase goes through a rigorous evaluation via local teams, regional hubs and Greystar HQ. For this reason, “every deal is an improvement on the last”, says Allnutt.
On the inside looking out
Those deals are picking up the pace now. The latest fundraise builds on Greystar’s develop-to-core joint ventures and core strategies, with a discretionary value-add fund answering to rising investor demand.
Fuller adds: “Investors want exposure, not just in the US, but a global exposure, like they have in logistics and industrial, like they have in offices. What we are really trying to do is provide great investment opportunities across the world to match those desires of investors.”
The latest vehicle will target student and multi-family, but also allows for expansion to senior housing, co-living and single-family housing, replicating Greystar’s strategy in the US.
The idea is “simplicity and scale”, adds Allnutt. For Greystar, scale means around 10,000 homes in a market. “What that gives you then is a huge amount of data, a load of customers, access to the best people, the best capital, the best sites,” says Allnutt. “Then it just snowballs from there, because you own and control all of that information.”
So, although the industry might still seem a mystery to some, inside Greystar the platform is ready. Now the strategy is: “Just keep going, scaling, leveraging the platform.”
Allnutt reflects on the naysayers, back in the old coffee shop days. “Everybody, all the industry participants, all the rest of the market, was like, ‘People don’t want the whole American thing. You can’t tell a British person to have a nice day and give them a free muffin. It won’t work,’” he says.
But it did, and in a Starbucks next to Tillermans Court, as I wait to be served, I consider Allnutt’s parting words: “We’ve already proved it.”
© Portraits by Tom Campbell
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