Build to Rent – a social evolution?

Whether a traditional developer or a household retail brand, BTR development carries the same table stakes:

1. to stabilise an asset, developments need to be occupied quickly and retain customers.
2. to achieve this, customers need to want to live there and have a reason to stay – it’s important to create a community.
3. Once operational and stabilised, the development needs to work efficiently – for its customers it needs to be hassle-free and convenient, and for its owners its ongoing operational costs must run smoothly.

With its increasing market presence, there is an ever-greater emphasis from BTR providers on what differentiates their product.  Initially, BTR developments were compared by the amenities they offered to residents; be it a concierge, social events, co-working spaces, lounges or swimming pools. By and large these were internal amenities, provided for residents only and without an external community presence. However, it is evident that the BTR market is evolving again, and now with a much more external facing dimension.

The modern consumer now has a greater awareness of a social consciousness, living in a progressive environment that prioritises sustainability, diversity, social mobility and community.  Increasingly, consumers expect the brands that they engage with to share this consciousness, and they can become strong attributes for building brand loyalty². 

BTR should not be any exception to this consumer expectation to act in a socially responsible manner.  Arguably, it is right for a customer to hold the brand which provides a roof over their head to a higher standard than where they, say, buy their groceries. And so, BTR brands are beginning to respond, with a transition to place-based developments built upon local partnerships. So why is this transition important?

Place- & partnership-based BTR

Over the past two years, with travel and lockdown restrictions, people have found themselves living locally and spending more time in their neighbourhoods.  For a development to thrive in these conditions, it needs to ingratiate itself within that community and neighbourhood.

Emerging BTR examples are now focusing on creating outward facing developments; transitioning from inward, private amenity space, to create publicly accessible spaces for their own residents and the wider community. Outdoor spaces are designed as inviting spaces which integrate the development within the wider neighbourhood and draw external visitors into the space.

BTR buildings, rather than a residents-only gym, are creating spaces for independent operators to front the street and help contribute to a vibrant new neighbourhood. They are creating public spaces that are anchored by a collection of independent, local restaurants, shops, breweries, and coffee shops.

Some new BTR gyms are becoming accessible for both residents and the public, with residents also being given the choice to complete exercise classes from their apartment via their TV and have nutritionist advice to help them eat healthier.

On several developments, those same independent operators have occupied sites as meanwhile uses, helping to establish a place and an identity for the development, with the reward of growing into permanent spaces when complete. The creation of a unique identity for a BTR development can act as a pull factor for customers and those new residents create both a critical mass for new commercial operators and a sense of place for visitors.

Developers are also finding ways to bring local creatives into their schemes, providing sculptors, artists, illustrators and photographs with canvases for their works. This creates both an opportunity to promote local artists and to create an authentic, place-based brand for the scheme.

It is this authenticity that is key; schemes will not be able to simply recreate the same formula, but instead they need to listen to the community and create a strategy bespoke for that place.

The quality of homes and service is no longer the sole differentiator for a developers’ brand; rather they will be measured in how they contribute to a community, by both their own residents and the public.

Finally, as the demographics for BTR homes expands and they capture the appeal of an inter-generational audience, this focus on the social impact of developments is likely to gain even more traction, and raises the question – what does the next BTR community need?

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¹ Deloitte’s retail trends for 2022 identify that conscious consumerism and a challenging market is encouraging retailers to diversity and move into completely new businesses to utilise their assets better and find new sources of growth.

² Deloitte’s research found that Gen Z are adopting more sustainable behaviours than any other groups: 50 per cent reduced how much they buy and 45 per cent stopped purchasing certain brands because of ethical or sustainability concerns.