Build to Rent Services - Allsop · 2 Build to Rent Services Build to Rent Services. 1. Allsop in...

Build to Rent Services

1. Allsop in numbers

2. The market

3. Research and consultancy

4. Management

5. Valuation and viability

6. Investment and development agency

7. Why work with us?

8. Case studies

9. Client testimonials

10. Contacts

Contents

3

Allsop have undertaken bespoke demographic analysis on more than 50 locations – UK wide

“

”

3Build to Rent Services2 Build to Rent Services

1. Allsop in numbers

Our coverage

Client Survey

95% satisfied with service level provided

Ranked

14th UK property

consultants on overall turnover

Over the last two years approximately

10% of the investment portfolio market transacted by Allsop’s National Investment Team

During the 2010 Revaluation

£70m+ savings for retailers

on business rate appeals

Top 10 ranked Investment Agency Practice

£1.4bn transacted in the last year

0

2,628 property transactions completed in the last year. That’s almost: 1* an hour, 9* a day, 46 a week, 197 a month (*a working day)

£1.034bn in the last year sold at auctionRanked number 1 auctioneers in UK

Valued over

£13bn of property in the last year

ALM manage over

£1.5bn+ worth of residential property in the UK

54 Build to Rent Services

“Allsop have to date advised on over £1.2bn of specialist BTR investment/development and valuation projects”

Build to Rent Services

There has been much publicised around the weight of money chasing UK purpose built residential rental developments from all corners of the world, however we are now seeing who is actually investing and we are able to identify the specialist developers making BTR schemes a reality.

The BTR sector is now firmly in the ‘development phase’, with the focus having shifted towards construction of schemes and stabilised stock management, including mobilisation of assets. The British Property Federation (BPF) latest figures demonstrate this shift into the construction phase, estimating an impressive 29,416 units completed and 43,374 under construction. The BPF estimate a further 66,718 units with planning permission.

London has taken back the majority gain of BTR homes with approximately 72,767 and 66,741 in the regions, with schemes in the regions having outnumbered London in Q2 2018.

Here at Allsop, we have been busy working with a large number of these active investors and developers on a range of levels, advising on all specialist areas within the emerging asset class.

This service overview summarises our range of expertise on all facets of BTR. We do not believe that one single person can be an expert on all things BTR, therefore the cohesive and joined up approach Allsop has taken in combining skill sets to provide best in class advice is the next best thing.

2. The market

Everyone needs to live somewhere. With the combination of the long term shortage of housing and people’s expectations of better quality housing, BTR is offering investors a secure long term investment platform, robust to the wider market concerns. As other asset classes suffer from a range of uncertainties (we try not to mention the ’B’ word), large scale, institutional grade residential investment is proving attractive.

Research & Consultancy

Development

Investment Management

Analysis & Viability

Valuation


3. Research and consultancy

Importance of research Good research and ‘market intelligence’ is crucial in order to thoroughly assess the viability of a BTR opportunity. BTR schemes are unique because they are long-term commercial grade investments, with long-term residential rental occupation in mind and therefore comprehensive analysis of the micro-market is required.

In order for a BTR scheme to be successful, market research must inform three essential principles. Firstly, what to build; including product design and the amenities that should be provided; secondly, value and return; here research must determine rental income and the best management strategy; finally, the proposition for investment; an understanding of how the market will respond and the likely investor profile. Research helps inform each of these strands.

Our expertise and insight is instrumental in determining planning, viability, due diligence and to inform further detailed consultancy.

Our approach to research There is no directly transferable blueprint for BTR. The viability of a scheme is linked to the nuances of the micro-market and our clients strategic objective, therefore our research is bespoke to each client and is adapted to suit individual developments.

Of course there are BTR ‘fundamentals’ for ‘base case’ scenarios, however a product varies in relation to the market so one size doesn’t fit all. We work closely with our clients to understand their requirements and add value at every level through tailored research.

The teamEmma Hart is principally responsible for our BTR research, specialising in assessing the fundamental market drivers and demand for rental product at a granular, local level right through to overarching market fundamentals.

Emma is assisted on the research by Vicky Lynch and George Metcalfe.

A joined up style Having been involved in numerous BTR schemes across the UK, the team is able to provide consultancy on a wide range of key BTR components, including; management and operations, research and capital markets.

Every element of the BTR advisory service can be utilised during this phase to ensure careful consideration at every part of the process, resulting in maximisation of value.

Our approach to consultancy Working alongside architects, planning advisors, project manager’s and the wider design team enables us to collaboratively create the best bespoke BTR proposition for a site.

Other consultancy services include:

• Shaping product design, mix, layout, amenity provision and specification for the demographic.

• Developing a product and service proposition for the target audience.

• Cost vs benefit assessment of amenity, service, life cycle, management provision with consideration for place making and design efficiency.

• Consideration of customer experience.

• Development of a viable, efficient and deliverable management budget.

• Key inputs to and creation of a working development appraisal and investment GDV.

The teamLed by Andy Pointon and Lesley Roberts, our consultancy services can involve every member of our BTR team to provide a comprehensive service.

The team has experience in research and analysis for many different types of build to rent products across the UK and has excellent capacity to access data and identify trends. We collectively tap into our industry contacts and use our 100,000+ database of clients, investors, and residents, plus data from units under our management.

“

”8 Build to Rent Services 9Build to Rent Services

Management mattersA thoughtful and comprehensive management strategy is critical to creating a successful BTR scheme. The management of an asset fundamentally determines the bottom line, whilst also shaping the complete resident and customer experience, setting the tone for the entire scheme and its future success.

Exemplary management begins at inception; influencing investment decisions, design, operation and ultimately delivering perpetual value.

Value to investors will rely as much upon efficient and strategic management, as locational characteristics and underlying property values. Allsop provides a holistic and efficient management solution which ensures a laser sharp focus on the crucial ‘Gross to Net’ operating margin, importantly, we do this without compromising the essential customer experience.

Our approach to managementAllsop Letting and Management (ALM) was established in 1990 and provides a specialist build to rent team which offers end-to-end management solutions tailored to optimise each asset and collectively portfolio returns.

The team combines the extensive experience of ALM in managing large scale PRS portfolios, with the breadth and depth of residential investment experience at Allsop.

Operating nationally, clients already benefitting from our service include; Realstar, Grainger, PWC, DTZ IM, Shell, Dorrington and Moorfield, providing services such as:-

• Product design and specification

• Service offering

• Resourcing

• Facilities, block and property management

• Marketing

• Lettings

• In-residence care

• Budget management

• Fund reporting

The teamOperating from our UK wide network of offices, the team is led by Lesley Roberts assisted by Matt Smith and Kelly Smith. Lesley, Matt and Kelly have over 45 years’ experience in the strategic management of large scale residential assets and portfolios and bring innovative and solution focussed approach.

The operations team has dedicated mobilisation, operations, lettings, management, marketing finance and IT professionals, all of whom specialise in their respective functions to ensure all bases are covered from throughout the entire process.

With over 50 staff across London, Brighton and Leeds, as well as 40+ operating on-site, the team has the depth and experience to meet the most challenging of client objectives.

4. Management

Allsop Lettings and Management operate over 5,000 residential units nationwide and specialise in institutional grade Build to Rent assets

“

”

10 Build to Rent Services 11Build to Rent Services

The value of a well-considered valuationAccurate property valuation is essential for informing investment strategy and decision making, and when it comes to a nascent sector like BTR, experience and insight are essential.

Boasting an enviable list of BTR case studies, our specialist valuers fundamentally understand the nuances of this asset class. Having worked with a broad client base on a range of single and mixed use developments over the past two decades in the private, public and charity sectors, our valuers are able to use their breadth of experience to assist with value engineering opportunities and maximising property value for the benefit of our clients.

Our valuation service provides robust asset and rental value assessments that inform viability, design, planning and the potential for alternative development options. Also essential for borrowing, tax planning, acquisition and disposal.

Our approach to valuationAn ability to reflect the market is undoubtedly much easier to accomplish by having close links to those in the market. The knowledge, experience and expertise of our agency and management team members provide our valuers with first hand exposure to transactions happening in the market. More importantly, market intelligence also gives invaluable information about the nuances of different investors and their individual methods of arriving at bid levels; to this point no two BTR investors take exactly the same approach.

We also have the benefit of a well-established bespoke BTR research offer which provides us with the key skillsets regarding analysis of demographics and market fundamentals for larger scale residential investment as well as management expertise to feed into understanding operational matrics.

The teamAndrew Wells and Rob Austen are the Allsop partners principally responsible for our BTR valuation, having specialised in this emerging sector over the last decade.

Andrew and Rob are assisted by Ciaran McGivney. Demographic input is provided by Emma, George and Vicky and management insight from Lesley.

5. Valuation and viability


Allsop value for both lenders and investors who are active in the BTR sector

“”

6. Investment and development agency

Proven skill in forward funding transactionsStructuring complicated forward funding agreements in an emerging asset class is a difficult process. However, with our substantial experience of agreeing such structures, we understand what solutions are at our disposal when assessing suitable transactions.

Our agency and valuation teams are more closely aligned when compared to other real estate investment sectors. This is important to underwrite defensible assumptions and investment criteria in an emerging sector, as up to date market intelligence is key and results in achieving the best results.

The BTR Agency team has advised on a number of schemes across the UK with a combined GDV in excess of £1bn, therefore, we understand what is needed for institutional investment, from market intelligence right through to key components of a specialist BTR appraisal.

Our approach to BTR Investment & DevelopmentWe are advocates of sensible assumptions, that are defensible, when analysing a potential BTR development. Of course, components change from scheme to scheme and will depend on the micro and macro factors, understanding these nuances results in a solid starting platform in understanding a scheme’s potential.

Other considerations include; ensuring a range of unit types across the scheme, assessing the development pipeline, understanding the current competition and ensuring the right balance between controlling build costs, programme and ensuring quality.

The key components of the team’s input are as follows:

• Continued guidance on the evolution of the development appraisal

• Effect on pricing from key changes to the scheme

• Market intelligence in a quickly emerging sector

• Partner lead advice

• Advice on key decisions throughout the design process

• Front line market knowledge and specialist contact base

The teamLed by Andy Pointon, the agency team comprises James Wilson, Andrew Boyd and Sam Verity who collectively cover the national market, ensuring our BTR expertise crosses the country. The team is supported by Ciaran and Olivia Bentley, whilst benefiting from the operational expertise of Lesley, Matt and Kelly and the valuation knowledge of Rob and Andrew.

We have a UK and international investor reach. Through Allsop’s alliance with Millennium Group we have strengthened our services to Asia-based investors looking to deploy capital into UK real estate.

The agency team advises investors, developers and landowners on all aspects of build to rent opportunities throughout the UK, assisting to maximise returns, manage risk and support long-term investment.

“

”

1514 Build to Rent Services Build to Rent Services

7. Why work with us?

When assessing a potential BTR development, there are a number of fundamentals we consider:

The location: how close is the potential development to transport hubs, town or city centre, amenities, places of employment and public spaces / parks.

The research team can recognise the scope of the rental levels, supply and demand in the market, the development pipeline, the affordability of the local residents and what is desired in terms of amenity – assessing what amenity is already nearby and the type of amenity which would set this scheme apart from others. We are also able to ascertain the optimum scale of the development. Effectively ‘future proofing’ the scheme as much as possible.

We like to progress schemes as far as we can before going out to the market, preferably after planning has been submitted. Having carried out the above processes we will have helped produce a well thought through scheme. Getting the vision to this position we are able to showcase the depth of detail, backed up by research and market intelligence.

We will produce a bespoke management budget for the scheme to understand the gross to net efficiencies. The team will also advise on design and layouts with future operation in mind.

The investment team plays an active role throughout the entire process feeding in market sentiment, requirements and how certain decisions would affect pricing and investor appetite.

Whilst the above highlights our approach to consultancy and disposal of a BTR scheme, we are also retained by a number of institutional investors to give acquisition advice. This service can be tailored for each circumstance, whether it be full investment underwriting, purchase reports, management consultancy or demographic research.

From day one, we will run a live appraisal alongside the design process. This enables us to see how each decision made effects pricing and viability. From a change in the unit mix, the construction programme length or the alteration of the design which affects operational costs, we are able to ascertain the effects on GDV, cost and profit.

The rental market: what is the rental tone in the micro location, which schemes / areas are achieving the highest rents, how many properties are on the market and how long have they been marketed for. Signaling the potential for absorption, affordability, supply and demand.

Capital values: generally we find that BTR schemes work best in locations where market sales values range between £300 - £800psf, benefitting from strong rental demand.

Design: every scheme is designed differently. However, from our experience there are key characteristics that should be considered when it comes to design. The best time for the team to enter the design process is at the very beginning, before pencil has been put to paper.

Management: considerations for operating costs and efficiency. Product, service proposition and deliverability is essential for short term viability and long term success. We can quickly establish management scope from outline development information.

Marketing ManagementAcquisitions and disposals

Research Joined up approach

Viability and marketability


8. Case studies

Fabrik, LeedsRole: Investment.

Scheme: 216 units comprising a U-shaped building around a central courtyard.

Amenities include: Residents lounge, gym, concierge and on-site management.

Allsop were brought in to advise on the pre-designed scheme and instructed to source an investment partner. Exchange of contracts has been achieved subject to detailed planning with a UK institutional investor.

Construction expected to commence in Q2 2019.

18 19Build to Rent ServicesBuild to Rent Services

8. Case studies8. Case studies

The Keel, LiverpoolRole: Consultancy and valuation advice.

Scheme: 240 high quality waterside build to rent apartments with on-site amenities and services.

Amenity includes: Two residents lounge’s, concierge and on-site management.

The first scale Build to Rent scheme delivered in the regions, the former HMRC office building, located on Kings Dock just minutes from Liverpool city centre, was converted to create a landmark residential building. Allsop provided strategic advice on local demand, the strength of the rental market, appropriate unit mix, desired amenities, scheme design and layout, an assessment of the management plan and an indicative valuation projection.

The Landmark, DerbyRole: Consultancy advice and investment.

Scheme: 201 efficiently designed apartments located over 17 storeys within what will be the tallest building in Derby.

Amenity includes: Residents lounge, gym, coffee breakout area, guest suite, concierge and on-site management.

Allsop were brought in to help advise on The Landmark in March 2018, three months before planning was submitted. We advised on substantial changes to the scheme which transformed the design into a BTR scheme and considered the long term operation of the building. Planning on The Landmark was granted in Q1 2019.

The preferred investor was selected in August 2018 and construction is expected to commence in Q3 2019.


8. Case studies8. Case studies

The Forge, NewcastleRole: Management.

Scheme: 283 premium quality one, two & three bedroom build to rent units adjacent to the Stephenson Quarter in central Newcastle. The first true BTR scheme in Newcastle. Designed over three buildings and released in phases.

Amenities include: Gym, residents lounge, integrated lockers, post / parcel room, offers and discounts with local businesses, 24/7 resident service agents, ultrafast broadband and private dining / meeting space.

Allsop has been appointed as managing agent and are currently mobilising the site. Our experience in mobilising and managing large scale residential developments has us well placed to advise on the various management strategies required to ensure the client’s financial targets are met.

Kent Street Baths, BirminghamRole: Research, consultancy and investment.

Scheme: 406 apartments designed for renting, comprising four residential blocks surrounding a central amenity hub and courtyard gardens.

Amenities include: Concierge, post / parcel room, on-site management, flexible amenity hub.

Appointed in April 2017, Allsop’s Build to Rent team were heavily involved in the project from concept design through to planning submission and eventual marketing for an investment partner.

Our initial process involved carrying out a thorough demographic review of the micro location of the site

in the Southside area of Birmingham, in addition to examining the wider Birmingham market; analysing supply, demand and development pipeline. From this initial research we were then able to provide consultancy advice on the appropriate unit mix, design features of the scheme and optimum layout. The day to day running of the management and customer journey was also considered when reviewing design and layouts etc.

During the design process, we were able to demonstrate the effects of key changes by running an operational budget alongside the development appraisal, meaning operational costs, build costs and overall value could be considered with each change in design.

23Build to Rent Services 22 Build to Rent Services

8. Case studies

The Trilogy, ManchesterRole: Consultancy and management.

Scheme: 232 apartments within three blocks.

Amenities include: Gym, residents lounge, integrated lockers, ultrafast broadband, 24/7 residents service agents, work spaces, on-site management, terraced gardens, post / parcel managements and offers and discounts with local businesses.

Allsop provided strategic advice on the demand and strength of the local market and later as part of the project team advised on specification and additional on-site services that could be offered to residents. Allsop have been appointed as managing agent and are mobilising the site to ensure pre-lets and lease up achieve the investor’s aspirations.


Build to Rent HousingAs the BTR market starts to mature for City Centre apartment blocks, we are now seeing a large movement of interest into BTR Housing.

Allsop are actively involved in a number of schemes of varying sizes and offering. This is an area that we expect to see substantial growth over the next few years as the large demand pool, liquidity and scale are attractive to investors.

9. Client testimonials

“Allsop have proven themselves to be a market leading consultant to the Build to Rent sector, providing support in a wide range of disciplines. Beyond their detailed focus and personal approach to projects, what really sets Allsop apart is the team’s comprehensive understanding of the day to day practicalities of the sector, using this insight to drive value for developer, investor and customer alike.”

Kitson Keen Head of Build to Rent, Home Group

10. Contacts

The teamE: [email protected]

Build to Rent

Andrew BoydMRTPI MRICSPartner+44 (0)20 7344 2609

Andy PointonMRICSPartner+44 (0)20 7543 6720

Sam VerityMRICSSurveyor+44 (0)20 7344 2693

Olivia BentleyGraduate Surveyor

+44 (0)20 7344 2638

Ciaran McGivneyMRICSSurveyor+44 (0)20 7344 2601

James WilsonMRICSPartner+44 (0)113 236 6679

Investment and development consultancy

Lesley RobertsMIRPM MARLA NAEAPartner

+44 (0)20 7344 2653

Matt SmithAssoc RICS MIRPM MARLAHead of Mobilisation+44 (0)113 290 2516

Kelly SmithMARLA MNAEAHead of BTR Operations+44 (0)20 7344 2622

Management and operational consultancy

Rob AustenMRICSPartner

+44 (0)20 7344 2669

Andrew WellsFRICSPartner

+44 (0)113 236 6670

Valuation

Vicky LynchResearch Analyst

+44 (0)113 236 6674

George MetcalfePlacement Surveyor

+44 (0)113 532 9211

Emma HartSenior Research Analyst+44 (0)113 236 6687

Research and consultancy

“Allsop bring a wealth of experience in managing rental properties to managing the Moorfield funds’ BTR assets. Lesley and her team share our customer service ambitions, and have proactively embraced new technologies and customer facing innovations to deliver an outstanding and seamless customer experience to our residents. We look forward to working together on future schemes.”

Sadie Malim Head of Special Projects and Legal, Moorfield Group

“Andy Pointon and his investment advisory team have been critical in navigating our BTR seed portfolio through the complex viability challenges around Build to Rent in a UK market that is still uncertain about this asset class. Andy’s background of commercial expertise is especially helpful when applied to the nuances of BTR that don’t align with traditional residential assumptions but the whole team are proactive, thorough, open and engaging. Their genuinely collaborative approach is refreshing and I particular value their ability to approach each scheme on its individual terms, rather than trying to apply one headline model that cannot reflect the inherently bespoke nature of BTR.”

Alex Notay Build to Rent Fund Director, PfP Capital


Contacts

Head office:33 Wigmore Street, London W1U 1BZTel: +44 (0)20 7437 6977 City office:2 Copthall Avenue, London EC2R 7DATel: +44 (0)20 7588 4433 Leeds office:8th Floor, Platform, New Station Street, Leeds LS1 4JBTel: +44 (0)113 236 6677

Brighton office:Princes House, 53-54 Queens Road, Brighton BN1 3XBTel: +44 (0)1273 322 013

allsop.co.uk

Services

Asset Management

Auctions

Build to Rent

Business Rates

Development Agency & Advisory

Investment (Sales & Acquisition)

Lease Consultancy

Letting and Management

Office Leasing (Central London)

Receivership

Valuation

www.allsop.co.uk

Build to Rent Services - Allsop · 2 Build to Rent Services Build to Rent Services. 1. Allsop in...

Documents

Transcript of Build to Rent Services - Allsop · 2 Build to Rent Services Build to Rent Services. 1. Allsop in...