Build to Rent (BTR) schemes have modernised the renting sector, combining luxury apartment living with convenience and community. Purpose-built student accommodation (PBSA) is shifting towards this model, and it is imperative it does so; to provide students with a lifestyle that aids their studies, wellbeing and social lives. Matthew Smith, Sales Manager at Grosvenor Systems, believes that PBSA providers should learn from the success of Build to Rent.
By Matthew Smith, Sales Manager at Grosvenor Systems
Investor interest in PBSA continues to grow, with asset manager abrdn the latest to join the fray with the launch of a PBSA platform to meet growing demand. Savills data showed that the total investment volume for PBSA in Europe reached €11.7bn in the first three quarters of 2022. However, rapid growth is rarely without challenges. As we, especially here at Grosvenor Systems, see greater flow of capital into the sector, there are lessons to be learnt from the parallel boom in the Build to Rent sector.
Build to Rent developments often prioritise creating a sense of community amongst tenants, providing shared amenities or communal spaces. Increasingly, this includes co-working spaces, lounges and gyms, but also a more diverse range of niche services – such as craft breweries, bike hire facilities, car charging points and more.
A mushrooming of services has been partly inspired by the post-Covid era which prioritised community lifestyle amenities for office employees. The ‘Googleplex’, Google’s California headquarters, has sleep pods, massage parlours, doctor’s offices, beautician stores and numerous cafes. This approach to commercial real estate is perhaps an extreme example, but nonetheless it seems to be indicative of the levels of creativity also being brought to the residential market. Build to Rent has adopted this community-minded approach as a staple of the sector.
Likewise, PBSA operators should focus on building communities among their student tenants, providing shared spaces and organising events that encourage a social atmosphere. Arguably this is even more essential to PBSA than it is to Build to Rent; instead of a typical young professional, who is likely to have roots, friends and a set path, students are taking their first steps and looking to socialise and build a new community. Build to Rent showed us that housing could be about more than a functional place to live, and PBSA can do the same. Students need more than a bed and a desk.
The Student Experience
Aside from fostering a sense of community, Build to Rent operators aim to provide a high level of service and convenience to tenants. Features including 24-hour maintenance, online rent payments and concierge services have become common. PBSA providers likewise can prioritise convenience for students who are familiarising themselves with adult living: on-site management, quick response times to maintenance requests, online booking and payment systems, and easy to use mobile applications. Incorporating these services can give companies a competitive edge.
For instance, at Grosvenor Systems, we recently partnered with Spike Global to design an integrated tenancy management solution where tenants can view the progression of their tenancy, sign contracts, and communicate with lettings teams from the platform. This user-friendly, intuitive communication system aims to create a smooth, satisfying experience for landlords and tenants alike. Tenant-engagement platforms can be a simple but effective way for PBSA operators to create a unique user experience.
Not only does enhancing communication channels increase tenant satisfaction, but it can drive efficiencies and generate additional revenue. Discount schemes can also provide value for both the tenant, housing provider and local community. For example, a reward scheme could provide PBSA tenants with money off at local gyms, foods stores, restaurants, shops or cinemas. Not only does this provide students with easy access to and knowledge of local amenities, but it also incentivises greater spending in the local community and drives business.
Automation and property management technology
Property management systems play a key role in the success of Build to Rent projects – with creative, technology-led solutions helping to ease the administrative burden faced by property owners and managers. This, in turn, creates time for staff to concentrate on improving their offering and focus on the tenant experience.
Just as software can aid the Build to Rent sector with day-to-day management, using automation and property management solutions can help the PBSA industry. PBSA operators need to account for certain necessities brought about by the particular rhythm and timing of student living. Rent collection, for instance, tends to align with term dates and student loans rather than a typical regular monthly instalment. Utilising complex pricing strategies can help to maximise profits and streamline the student living experience.
Similarly, proptech solutions allow for access to payment history and future scheduled payments, as well as automated rent collection; ensuring that the payment process is more transparent, as well as reducing user errors and preventing missed payments.
Customer experience must remain the watchword for the PBSA sector. This is perhaps the key lesson to be learnt from the success of Build to Rent. Property management systems need to be seamless to ensure tenant satisfaction. With responsive and functionality rich property management systems, PBSA operators can enhance the living experience of students and have an edge on competitors in a booming market.