Taylor Scott International News
American style Build to Rent developments are catching on in the UK with the first due to be complete later this year and more set to come on stream in the next 18 months. The Build to Rent concept, known as multifamily in the US, could potentially transform the private rental sector into a service industry in the UK, according to industry experts. A report from law firm Addleshaw Goddard and the British Property Federation says the growth of the sector is good news for the economy, investors and tenants. With nine million people renting in the UK, Build to Rent has the potential to improve standards and provide better value and greater transparency. These developments are converted offices or purpose built apartment blocks which are professionally managed by specialist companies and rented out to private tenants. They mark a big step away from the traditional renting scene in the UK and some countries on the continent, including France and Spain, where residential properties are largely privately held and development of apartments has failed to keep pace with demand. ‘What it means for your average tenant is probably a better quality of life. When for example, the toilet breaks, there are people to fix it right away. As a tenant you don’t spend time managing the property, you get someone else to do it for you and you get on with living your life,’ said Adam Challis, head of residential research at real estate services firm JLL. Indeed, good maintenance of properties is an area where many small private landlords currently fall short. ‘Build to Rent has the potential to vastly improve standards in housing and because companies invest for the long term, they are more open to innovative design and more creative approaches which keep customers happy,’ said Marnix Elsenaar, head of housing at Addleshaw Goddard. As a growing sector, Build to Rent is now attracting the interest of investors. ‘The London story, and the UK story generally, is pretty unique in that we don’t have an institutional quality residential asset class yet,’ Challis explained, adding that this is set to change if the build to rent sector in countries such as the UK, Spain and France follows in the footsteps of the US. Multifamily investment is big business in America. Popular among private equity and pension funds, it offers some of the best returns in American real estate and last year saw record breaking volumes of $110 billion, topping the 2007 peak. And European countries such as Germany and the Netherlands already built up a multifamily market which continues to grow. JLL figures show demand for development and new build investments in the major German cities remains robust with €340 million invested in the first quarter of 2015. Similarly in the Netherlands, residential investment volumes hit €710 million, which is a 189 percent increase year on year and Sweden’s residential sector also continues to perform well. This bodes well for development in the… Taylor Scott International
Taylor Scott International, Taylor Scott
