GSAIR 2023 42
Credit : Appart ’ City
Now , the notion that it ’ s justifiable to lock away multiple units under one lease agreement , effectively removing these properties from long-term housing , feels out of touch with public sentiment and is driving operators to focus on long term stays in a bid to remain compliant with local planning restrictions .
Build to Rent ( BTR )
Historically , institutional capital has flocked to the safe havens of commercial property ; offices , logistics , and student accommodation ( PBSA ), but appetites for alternative operational real estate within the ‘ living sector ’ have really opened up with BTR , Aparthotels and Serviced Apartments increasingly gaining traction with institutional investors .
With BTR , investors forward-fund a large-scale housing development and have an in-house management company in place to deal exclusively in long-term lets . Whether staying for a week or a year , tenants now have more choices available to them , so institutional landlords are demonstrating value by offering more amenities and services .
Serviced apartments haven ’ t always been considered institutional grade assets , but we are beginning to detect a blurring of the lines between traditional BTR and serviced apartments . This is partly born out of renters demanding flexibility , but is also driven by owners seeking higher net returns by blending extended stays alongside long-term rentals .
This is where professional serviced apartment operators can add value because they already have the necessary skill set to handle labour intensive short term lets , revenue management and customer service , which are the cornerstones of any successful short term rental business .
Institutional investors are indeed ploughing capital into every part of the living sector , today BTR with the sharpest yield is at number one , similarly Aparthotels which provide long-term index linked leases are viewed as highly attractive investments .
Co-living
Co-living is an asset class that sits at the intersection of BTR and PBSA . In recent years , Co-living has gained a great deal of momentum with developers . Its bills inclusive , community-focused rental model has proved popular with those seeking design-led , self-contained living quarters plus on-site amenities , events , and opportunities for residents to network thrown in , all for less than the cost of a private apartment .
Currently , there are a handful of Co-living properties in London like The Collective and The Ark , but we expect