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An indisputable yet vastly overlooked factor driving the strongest property investments is the resident experience.
According to JLL’s Tenants Survey 2023, 47% of renters had lived in their current property for less than a year, and 42% said they’d be likely to move within the next year. Highlighting the transient nature of today’s renters, it’s important to create a living experience good enough to make them want to stay.
Developers who are truly ‘resident-centric’, understand that every detail of a residential building must be shaped around the needs of the people who will live in it. Developers and investors must ask themselves: What is your target rental demographic? Do you understand their needs and desired lifestyle?
Rather than ticking boxes, it’s about innovating; challenging the boundaries of what a build-to-rent property can offer; easing the pain points of renters; and in turn, delivering something that some didn’t even know they needed.
The result for investors? Higher rental yields, increased property value, and fewer vacant periods.
A changing rental model
The rental model has shifted in recent years from the traditional ‘landlord’ approach, where renting was a stop gap before ‘tenants’ bought their first home. In today’s build-to-rent market, the resident has more choice of where they rent, meaning developers must stand out in the market and create a living experience that aligns with modern lifestyles and aspirations.
In 2023, investors must cater to the ever-transient desires and expectations of the resident, offering a flexible and rewarding lifestyle that goes beyond just a convenient place to stay. From the design and architecture of the building, to community management and choice of ground floor cafés and eateries, it's up to the developer to deliver a place where people want to live.
What do renters really want?
While emerging trends show an increased desire for premium amenities such as swimming pools, gyms, rooftop terraces and co-working spaces, location remains the most important factor among renters. Prime city centre locations offer closer proximity to the workplace, access to better transport links, and the desired city living experience.
Against the backdrop of rising energy bills and an increased cost of living, JLL’s report identified that another key factor for renters is energy efficiency. More than three quarters (76%) of renters stated that their home’s energy efficiency is more important to them now than a year ago. The good news for build-to-rent investors? 85% of newly-built properties have an Energy Performance Certificate (EPC) rating of A or B - the highest levels of energy efficiency (JLL analysis of ONS data).
As almost three quarters of the tenants surveyed said they work from home at least some of the time, amenities are increasingly important. Showing health and wellbeing to be a top priority, 45% said they used the gym within their buildings regularly, while 73% of those with swimming pools in their buildings said they used it either regularly or occasionally.
The value of branded residences
When buying a car, a new phone, or booking a hotel, people understand the affiliation of a luxury brand to the product, through the associated quality, design and service that differentiate those brands. For example, when booking a hotel, you’d expect a different experience in the Mandarin Oriental than you would in a Travelodge. While both have an established place in the market, their brands help consumers make a decision on where to stay based on price point and perceived value for money.
Similarly, a luxury residential property brand can provide the incentive for buyers and renters to pay a premium. Savills’ analysis shows that the average global premium for branded residences, over a comparable non-branded product, stands at 30% on an unweighted basis.
One Port Street is the first development to come from Select Property’s flagship residential brand, the Prestige Collection. With established property brands such as Affinity Living, CitySuites and having played a key role in the Vita Student story, Select Property has a long reputation of evolving UK property brands across multiple sectors.
In summary
Location, premium amenities and building management should be at the top of the agenda for developers and investors alike. But rather than seeing these things as a tick-box list for success, they should work together organically as pillars, cultivating an authentic culture and a vibrant resident community.
Ultimately, renters are willing to pay a premium for their desired lifestyle, translating to stronger returns, fewer void periods, and an attractive long-term investment for years to come.
Investing with Select Property
Select Property is a leading UK property developer, with 20 years’ experience developing established property brands like Affinity Living, CitySuites, and Vita Student (now part of Vita Group).
Having sold over £2.8bn worth of global property, we have paid over £180m in rental revenue to our investors. Our international offices in Manchester, Dubai, Shanghai and Hong Kong means we’re always on hand to support the bespoke needs of our investors.
Our mission is to develop the most exciting property investments, shaped by people and place, to drive the strongest returns for global investors. We pride ourselves on our resident centricity, delivering on the needs of the rental market to ensure the most successful long-term investments.
Our end-to-end investment journey makes investing as easy, and rewarding, as possible. From consultation through to exit strategy via our in-house brokerage, we can manage every aspect of your investment on your behalf.
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