8 refreshed ideas for built-to-rent residential
Design in line with the ULI’s new best practice guide
This month, the Urban Land Institute (ULI) launched its Build-to-Rent Best Practice Guide, the first of its kind for the burgeoning built-to-rent market in the UK. Developed to encourage high-quality developments in the private-rented sector, the guide features a chapter on fit-out specifications led and co-authored by RTKL’s Todd Lundgren, executive director in our London office and a member of the 13-person multidiscipline steering committee tasked with delivering the report. The report’s official release, which took place at a launch event in London last week, comes on the heels of £1 billion in government-backed guarantees made available to unlock private investment for the sector.
The ULI guide, available here, comes to the market two years after RTKL launched its widely circulated “8 Big Ideas for Build-to-Let Residential” book, which similarly aimed to establish the differences between for-sale private residential property and purpose-built private rental property. Today, as developers and investors dip their toes into the build-to-rent market and a growing number of projects throughout the UK appear on the books, we revisit our original ideas and update them to reflect growing intelligence in the market.
1. Plan on regeneration: Over the past several decades, RTKL has designed more than 500,000 square feet of purpose-built rental accommodation in the United States, and as result, we have been able to track and witness first-hand the long-term impact this product type can have on the regeneration of towns and communities. Today in the UK, we increasingly have conversations with councils interested in leveraging rental in similar ways to speed up major regeneration schemes. Because these projects are not held to a sales process, high-quality residential can be put in the ground quickly (often on underutilized sites), create immediate income streams, and spur and support additional investment.
2. Achieve big by designing small: Two years ago, we responded to market concerns regarding scale by recommending developers employ design efficiencies to achieve critical unit numbers. Today, as we work with some of those same developers on live operating models, we are finding more and more ways to re-think traditional UK residential design to create efficiencies in lift cores, units and circulation while upholding living quality, community amenity and sense of space. Current thinking dictates 100 units is the minimum scale required to operate and support high-quality service offering, making it more important than ever to employ design that doesn’t necessarily assume smaller units, but instead challenges conventional wisdom to redress the balance of space.
3. Unlock hidden land value: Around the country, we’re now seeing councils identify build-to-rent as a means of responding to more than just housing shortage. Many view the project typology as a method to address other issues as well, such as underperforming high streets, underutilized brownfield sites, and underserved communities. Well-designed, purpose-built rental works exceptionally well in mixed-use environments, because it provides a 24-hour resident base. Because that base isn’t held to traditional NIMBYism, private rental can also be built on sites where for-sale product previously has been seen as undesirable.
4. Build to flex: Over the past two years, we have seen the build-to-rent conversation in the UK shift from developers’ business models dictating eventual conversion to for-sale product, to a more holistic long-term view on rental as an enduring source of income. Back then, we lauded the inherent flexibility of the project type regardless of its eventual purpose. Today as more institutional investors enter the market looking for long-term returns, the same flexibility remains important. Build-to-rent is a safe way of preserving land rather than consuming it.
5. Gain more by offering less: Less cost, that is. When we first issued our ideas book, we addressed the growing need for affordable rental accommodation by asserting that design plays an important role in keeping costs for renters obtainable. Over the past two years, as the for-sale property market, particularly in London, has become increasingly prohibitive for many first-time buyers, the profile of renters has broadened, demanding high-quality rental property on a broad economic scale. We are joining the industry in responding by looking innovatively at national and local space standards. By approaching for-rent properties with the view that renters live as much in the building as in the unit, we can effectively re-package a project to make a home the whole place as opposed to just the apartment. This approach enables us to respond more flexibly to specific demographics, locations, and budgets.
6. Strike a new balance: In recent years, the UK market has recognised that renters seek community and lifestyle within a building in a way that owners don’t. With this much-documented realisation has come an interest in amenities offered by similar project types in other countries—spaces and services as diverse as gyms, pet spas, hobby workshops, personal concierges and “digerati dens”. Regardless of the community-building features chosen for a particular project, important operational and design considerations must be given to all amenities to ensure they are effectively utilised and translate to overall rental values. Shared facilities—from amenities to circulation—can have a significant impact on the success and draw of a rental property, but to do so must reflect the needs and expectations of the target market.
7. Build loyalty by creating variety: Two years ago, we suggested providing a variety of unit types within a building to retain renters over time. Today, as developers and investors look to bring large-scale portfolios of rental buildings to market, often under a single brand, we have been able to expand this concept to networks of buildings, exploring how renters can be motivated to move within a portfolio of projects as their needs and interests change. We have also looked closely at standards like Lifetime Homes, which when interpreted beyond a unit and across a building, have the power to provide greater flexibility to developers and investors without compromising the offer to renters.
8. Brand with a plan: Brand is becoming an increasingly hot topic among players entering the built-to-rent market, as many explore how best to bring a portfolio of desirable projects to market. Rental buildings are not just selling accommodation; they are selling aspirational lifestyles. We are working with our clients to identify demographic and psychographic renter profiles, define compelling market positions, and establish brand guidelines that ensure a consistent and compelling experience across properties. We are finding that brand is key to redefining rental in the UK and establishing it as a desirable way to life.
Contact:
Todd Lundgren, Executive Director
+44 (0)20 7306 0404
CallisonRTKL
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