Build to rent target market

[donna]

Hi all,

Who is the target market for our build-to-rent properties?

In Australia, it’s the above average income earners who can afford the above average rents. The developments are in premium areas and high spec with services like gyms, swimming pools, outdoor communal spaces. Plus concierge services too.

is this our target market? Up to now I’ve seen the BtR as a low income housing solution in NZ. Which is harder to attract investment and higher risk if the tenants are unemployed and anti-social etc.

cheers

Donna

[AlexL]

Just having come back from the property council conference last week, BTR was a topic widely discussed and is gaining momentum in Australia/NZ.
Its definitely aimed the average+ income earners, which provides the asset owners benefits (higher rent, better tenants etc.)

The speaker at the conference had a bit to say about all the added extras such as mini theaters, gyms, co-working spaces, laundry services etc. Essentially the idea is that the tenant is not just paying to rent the unit, they are paying to rent the whole building with its services. Also the opportunity to add income streams from renting out the theatrers, gyms, private dining etc. The entity building the BTR is also not necessarily the one running it, they can out source to BTR managers who would take over the running of the apartment and this would likely be in conjunction with the use of digital apps, i.e. an app to book the theater, gym, cleaners etc.

I talked to a few people on what the appeal of BTR was given the yields don't seem that high. Their comments were that it helped property funds to diversify their portfolio and it was a stable asset class, e.g. less vacancies compared to commercial tenants and mitigates issues commercial offices have/are facing with Covid WFH policies,

[donna]

^^ Thanks AlexL.

So fund managers are the owners? I heard the top-tier banks were keen on them too. They would then have the asset too.

cheers

Donna

[donna]

Why not the rent to buy developments for FHBs - it’s a consideration for tackling the housing crisis in Queensland.

Who pays for it? The super funds.

Maybe NZ looks at this too.

regards

Donna