Build to rent A progress report Demand Income and diversification BREAKDOWN OF INCREASED ALLOCATION, BY SECTOR 24% 19% 14% 11% 10% 10% 9% 4% PRS Student Infrastructure Hotels Self Storage Healthcare Leisure Data Centres JVs commonplace Development Monitoring Fund & Investment Asset management management Development Property expertise management Facilities & Construction on-site expertise management Grainger Site finding Partnership Lettings 2016 – off to a flyer London – housing starts Source: Molior London – pipeline Source: Molior BTR Map Source: Molior London…Manchester.. • Mainly core cities: Outer London, Manchester, Liverpool, Birmingham, Bristol, Leeds • Starting to see BTR developments in smaller cities , Aberdeen, Bath, Norwich, Southampton • Works well in places where strong demand for renting, land prices are not rampant • Near to public transport • University towns and cities • More flats than houses Mid-market Out of 71 completed Build to Rent schemes in London: • 9 are specifically rented to local authority waiting list residents (9% of units). • 60 are broad open market schemes (90% of units). • 2 are premium market schemes (1% of units). Source: Molior Mid-market – Fizzy Canning Town Poplar Stepney Epsom Completed September 2012 Completed December 2013 Completed March 2014 Completed March 2013 75 x 1, 2 & 3 bed units 45 x 1, 2 & 3 bed units 63 x 1, 2 & 3 bed units 63 x 1 & 2 bed units Lewisham Finchley Silvertown Reach Hayes Launching March 2016 Planning app submitted 2015 Launching 2018 / 2019 Launching 2018 136 x 1 & 2 bed units 70 x 1, 2 & 3 bed units 348 x 1, 2 & 3 bed units 189 x 1, 2 & 3 bed units Fizzy - customers • 246 Apartments let at rents that are affordable • 470 tenants, 19 dogs and 9 cats • Living as singles, couples and sharers • Diverse mix of professionals and students • Average salary in London of £40,500 pa • Salaries range from £16,000 - £90,000 pa • Ages ranging from 19 to 65 with an average Retail, wholesale 3% and automotive 18% 10% of 31 Hospitality • Spend 28% of income after tax on rent Information and 22% communication 19% Financial and professional services Education and health 28% Other services Greystar - Greenford Grainger - Abbeville •Average age: 31 (min 19 Max 66) •Average income £35K •Occupations: 17% in IT, 14% in Finance, 11% teaching, 8% health care, 7% admin, 3% Construction •100 units let in 8 weeks L&G Salford Lack of familiarity Viability L&G factory Largest modular construction factory in the world Stamp duty surcharge Benefits • Adds to supply • Diversifies supply base • Innovation in PRS • No speculation/empty units • Mid market housing offer • Aids place-making • Can help kick start larger developments/ regeneration • Speeds up housing delivery • Support town-centre intensification • On public land - income, rather than sell/lose control of land MP attitudes Source: ComRes 150 MPs And views on supply Source: ComRes 150 MPs Thank you! [email protected], tel: 020 7802 0112 .