Indicating the direction in which the British property market is travelling, a new trade association for the apartment industry has been launched. The UK Apartment Association (UKAA), aims to spearhead the professionalisation of the residential rental sector by differentiating the build to rent, multi-family housing market from the amateur ad hoc rental service provided by small-scale landlords that currently make up the bulk of rental properties in the UK.
With more than nine million renters in the UK and vast potential for that number to grow, there is a huge opportunity for build to rent developments as an institutional asset class. The number of developers and investors committing to projects has risen but there is still a distance to go before renting becomes the professional, service-led industry backed by large institutional investors that it is in the USA.
Backed by the National Apartment Association of America (NAA), and as its first international partner the UKAA will benefit from the experience of the US multi-family industry. Doug Culkin, President and CEO of the NAA, said: “NAA is eager to bring industry training, best practices and networking opportunities to the UK. In addition, our U.S. members are increasingly seeing opportunities for global growth and are looking to NAA for guidance when entering a new market. Our partnership with UKAA will be invaluable to our association as we address the growing need for a global rental housing industry.” The NAA is a federation of nearly 170 state and local affiliates, encompassing over 69,000 members representing more than 8.1 million apartment homes throughout the United States and Canada.
Ambitions for the UKAA are more modest, explained Roger Southam - the founder of the UKAA -, "We’d be happy to welcome a few hundred members in our first year,” he said. After a one-off joining fee of £250 per year, members will pay a tiered rate based on the size of the organisation in staff numbers with the most expensive membership being £895 plus vat per year.
A growing number of high-profile companies and professionals from across the sector have already signed up as members including Atlas, Hermes, Greystar, Manchester Life and Savills with suppliers including Roomservice by CORT and Yardi. Jonathan Ivory, UK Managing Director of Atlas Residential and a founder member of the UKAA explained his attraction for joining was that members will get access to educational training, customer service delivery, study tours, a suppliers’ forum, market data and a range of other resources.
These are things not necessarily available from the other property trade and professional bodies in the sector who the UKAA is keen to work alongside.
Housing Minister Brandon Lewis has welcomed the UKAA’s creation:
“I want to see the private rented sector respond to the nation’s housing needs by providing new forms of supply and improved quality and choice. I welcome the UKAA as a body that can help build the capabilities of the build to rent sector in this country, bringing together the needs of private renters with the institutional capital that wants to invest in meeting their demands.”
The UKAA is currently being hosted in Roger Southam’s Chainbow office in London, but will soon move to a home of it own as it recruits its first executive team.
CASE STUDY: MAKING THE PRIVATE RENTED SECTOR A REALITY IN THE UK
This alternative to the traditional landlord for residents, especially among Generation Rent is a high quality, branded purpose built rental home that offers added benefits of ancillary amenities on the doorstep and the peace of mind of renting from a large, professional landlord. One example is this former fruit & vegetable market in Southampton city centre which was acquired by North American multifamily specialist operators Atlas Residential and European private equity investors Rockspring in ajoint venture in the summer of 2015.
The purpose build to rent project is now being developed into 211 contemporary one and two bedroom apartments which when complete in 2017 will be operated by Atlas Residential entirely on a rental basis.
The property will be the first of its type in Southampton and its residents will be able to enjoy on-site amenities including 127 private underground car parking spaces, concierge, maintenance, club lounge, cyber cafe, games room, gym and an independent convenience store.