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For build-to-rent models to be successful in Australia, residential properties need to be designed specifically to suit the market of people they are attracting and be multi-use and multi-functional.
Global architecture practice Woods Bagot has been leading the emerging build-to-rent sector in the UK, working with a number of significant developers including Quintain and Essential Living, conducting market research and designing build-to-rent projects according to client and end user needs.
Woods Bagot London Principal Jonathan Clarke, comments on the design focuses of BTR and work in the UK.
“This is a new model for city living which demands a new approach to marketing, funding and management; BTR operators need to think of their portfolio as a brand and something that people will want to come and be a part of. It is essential for end users and the durability of BTR that these homes provide personality and flexible amenities that contribute to the community,” he said.
In addition, Clarke emphasised to the need for careful design, in order to rollout successful build-to-rent schemes in Australia.
“Developers and contractors are always searching for new ways to reduce build cost, but in market sale the focus is on market positioning and sale value. In build-to-rent the focus has to be on operational efficiency, the value and the experience you can offer your customers.”
He said it was important to understand the longevity of build-to-rent assets and how to generate value over the longer-term.
“Build-to-rent assets are long-term investments that need to continue to attract and retain customers, so the building needs to age well.”
Clarke said it was important for developers to know how people live in spaces, use rooms, what they need, and how they live in a certain area.
“Developers have to start with questions like: ‘what are the benefits of this neighbourhood and how do we design specifically to take advantage of them?’ This is crucial for getting the build-to-rent model right.
“If you start by thinking about how people use spaces, and how that changes over time, you can deliver amazing properties that people will stay in long-term which will be valuable assets for decades to come.”
In the UK, Woods Bagot’s design difference has focused on operational efficiency with every £1 saved on operational running costs increasing the value of a build-to-rent scheme by £26, and understanding that every £1 spent on operations is a £1 less profit/return/yield seen by the owner.
Woods Bagot London Associate Principal Simon Saint, believes build-to-rent faces the same challenges in Australia that have been seen in the UK.
“The difference between the two markets is the institutional money which is looking for the secure, consistent yield offered by build-to-rent. The other challenge is that build-to-rent assets haven’t matured into a liquid market yet, just as major office schemes get sold as assets, build-to-rent schemes will eventually be traded in a similar manner, at which point the capital growth has to be taken into consideration.”
Saint said Woods Bagot’s architectural model was about creating a flexible framework based on the most efficient structural spacing and then designing apartment typologies, which fit within that framework, while providing a level of controlled flexibility and variety in the layouts.
“By using a suite of apartment layouts that fit within a consistent and regular architectural framework, we have a repeatable and regular building which can then be clad to suit the context in which it sits.”
Jonathan Clarke and Simon Saint will be speaking at a Build to Rent Property Council of Australia Business Lunch on October 6 in Sydney and breakfast on October 12 in Melbourne, as well as a series of closed functions in Perth.