Build to Rent in Australia offers massive scale, with huge growth opportunities present in the middle market for an affordable alternative renting product aimed at those who will never own their own home.
By Mark Patterson, Canyon Brand
This will drive expansion of the Build to Rent category, with more brands entering at different price points and offering different service and experience. The consideration today for brands is how to build in stretch to future-proof for this expanded market?
Yasmin Booker of Aware Real Estate has spent many years in the UK where Build to Rent is further along in its evolution. She says the Australian market needs to be prepared for an onslaught of new entrants and what that means for brand.
“What’s interesting in the UK from the brand perspective is that there are a range of new entrants who want a piece of the pie.
“John Lewis, the retailer, highly trusted by the public, has launched four seed assets across the UK, and we’ve had high street retail banks like Lloyds entering under their Build to Rent platform Citra Living [now Lloyds Living]. Then pension funds.”
Yasmin Booker, Aware Real Estate
The experts agree the sector holds immense promise in Australia. In particular, they say that volume lies in the middle Australia market, yet there isn’t a product targeting these people as most brands are focused on the top 10% of the rental population.
“Theoretically Build to Rent will be a much larger sector than even commercial property in years to come.
“At the moment, it is popping up in the cool parts of our cities. But ultimately with the volume challenge we have with the undersupply of housing, this needs to be solved through a mass market product.
“The opportunity is in middle Australia.”
Rory Hunter, Founder, Model
This market expansion will ultimately deliver more groups with brands spanning low end and high end – just think Qantas and its low-fi option Jetstar.
This requires brand stretch and should force operators today to think about how they are future proofing for potential acquisition and consolidation down the track as the sector matures.
“What I would really like to see is the delivery of more mid-range affordable product in Australia.
“In the future, we’ll see more Build to Rent which has a lesser service and amenity offer but capitalises on local amenity in the immediate area. That’s where location is key.
“When it comes back to brand it’s really good to build flex into your brand in case you do want to expand into other markets.”
Yasmin Booker, Aware Real Estate
Yasmin adds that it is natural right now for brands to be competing on location, but that won’t always be the case.
Location will be critical, but success will be in service and brand continuity across locations. We examine this in our final piece on Build to Rent branding.
Part one of this series examined the potential of brand across the sector, and part two looked into the risks that threaten the potential of brand in Build to Rent.
