’Smart’ leap for build to rent

We spoke to 1,500 renters around the world to gauge how they view their home in the light of the working from home revolution triggered by COVID-19.

With most renters never anticipating spending so much time in their apartments, let alone working there, the concept of service-focused build to rent has been fully put to the test.

And it is smart building technology that has come through with flying colours in the world of build to rent:

• Smart buildings will deliver higher rents, with renters and potential renters willing to pay 20% more on average in rent to live in a building with smart technology provided by the landlord.
• Eight in 10 of those we polled agreed that smart technology makes buildings more sustainable.
• Just under half (47%) said they find living in a building that has net zero emissions very important, with this number highest (68%) in the United Arab Emirates and lowest in the UK (33%).
• The key benefits of smart building technology in a residential building are an increased sense of safety and more convenience.
• Sustainable power generators like solar panels are the most appealing smart building technology to renters, with 54% finding them very appealing.

Virtual and augmented reality viewings are exciting to renters around the world, with the 250 United Arab Emirates renters we polled expecting the biggest impact, closely followed by those in Singapore.

There is still a strong preference to physically view a property before agreeing to rent, but tech allows renters to sift out options more readily.

Overall, build to rent has had a good pandemic, with people valuing their homes as they spend more time in them and enjoying the benefits of new-build developments with amenities ranging from organised digital cooking classes to resident apps which give local health updates.

With occupancy in most UK build to rent assets remaining above 90%, and rent collection at high levels, investors have realised that the sector is more robust than some more traditional asset classes. Even in a pandemic and with multiple UK lockdowns, people need somewhere to live.

This is reflected in strong investor interest in the sector, with CBRE reporting that a record GBP 3.5bn was deployed in UK build to rent in 2020, up 30% on 2019. The momentum continued into 2021, with Savills saying that GBP 1.2bn was invested in the first quarter of the year.

There is an increasing view among leading build to rent owners like Get Living and Greystar that customers will develop a growing awareness of the best operators based on the quality of their service as well as the location and the asset itself.

This will allow the best operators to command a quality premium based on their track record and ratings on customer service websites, while less sophisticated operators unable to invest in tech will command lower rents and even critical reviews.