Hoteliers tend to obsess over customer satisfaction, and that’s what the build-to-rent sector has to start doing
There is a growing appetite in the UK to develop the private rented sector (PRS) from all fronts; the build-to-rent model will be a fundamental element of this growth but is the sector’s existing approach to this model progressive enough to succeed? My view is that much can be learnt from other parts of the property mix.
From a residential development mind-set, developers build volume, compare square footage rates and sell units throughout the build period. When a unit has been sold, any ongoing obligations for the developer to manage the product, improve operations, or address perceptions of the scheme dissolve the further from the point of sale you get. I do not believe that this approach will succeed for the long-term and must look at other models to see what can be learnt.
Like hotel guests, PRS residents will expect a community, a culture, and certainly not a “unit”. PRS operators and developers need to consider their customer in this light, and the residential delivery model may struggle in its transition into PRS without at least some level of experience across the sector.
The delivery of PRS schemes can carry pitfalls, so let’s take a model that has grown in the UK over the last 10 plus years to become one of the leading markets in the world. One that has well established supply chains, funding solutions, and delivery models capable of going from inception to completion of 100-bed properties within a year… hotels.
If a happy resident is the common denominator for success in both hotels and the PRS, then responsibility for delivering and sustaining a successful PRS scheme sits with the operator
Hoteliers and developers have evolved to meet the spike in demand, looking into 11m2 rooms, and rooms with no natural light, to improve returns on capital.
At the Urban Land Institute’s Build-to-Rent: Design Guide conference, the key message from PRS developers was that the industry’s perception of renters has to shift. They are not “tenants”, but “residents”, and really almost guests. We have observed first-hand how successful hoteliers and hotel operators work to fully understand the needs, and, most importantly, aspirations of their guests. Like the PRS developers at the ULI event explained, it is a happy resident that is the key to achieving a successful PRS scheme.
Therefore, if a happy resident is the common denominator for success in both hotels and the PRS, then responsibility for delivering and sustaining a successful PRS scheme sits with the operator. Once we start to consider how pivotal this role is, a host of other similarities arise that are all connected directly to the resident’s experience of the building. These include: interior design, fixtures, fittings and equipment, operating services and equipment, customer service, logistics, operations and maintenance. Successful hotel operators place their own understanding of their guests at the heart of the business.
The evolution of the PRS is a fundamental tenet of future housing supply and one that is underpinned by the property sector’s ability to supply a viable product to the market. The build to rent sector still has some way to go but giant strides will be made when real focus is devoted to identifying the tenant of the future and development of a PRS-specific operator will help. Customer focus is paramount to the success of build to rent, as is improving service standards. This starts from the very outset of the construction process, but operators with the right, progressive approach to brand will develop a build to rent customer base for the long-term.
Adam Mursal is founder and project manager at TowerEight