THAMES ESTUARY GROWTH DAY INSTITUTIONAL PRS INVESTMENT AND BUILD TO - - PowerPoint PPT Presentation

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THAMES ESTUARY GROWTH DAY INSTITUTIONAL PRS INVESTMENT AND BUILD TO - - PowerPoint PPT Presentation

Sep 13, 2023 320 likes •536 views

GREYSTAR EUROPE GREYSTAR EUROPE THAMES ESTUARY GROWTH DAY INSTITUTIONAL PRS INVESTMENT AND BUILD TO RENT MICHELA HANCOCK, SENIOR DEVELOPMENT DIRECTOR MICHELA HANCOCK, SENIOR DEVELOPMENT DIRECTOR mhancock@greystar.com GREYSTAR EUROPE WHAT IS

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INSTITUTIONAL PRS INVESTMENT AND BUILD TO RENT

MICHELA HANCOCK, SENIOR DEVELOPMENT DIRECTOR

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THAMES ESTUARY GROWTH DAY MICHELA HANCOCK, SENIOR DEVELOPMENT DIRECTOR mhancock@greystar.com

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WHAT IS GREYSTAR?

Greystar is a global leader in rental housing with expertise in property management, investment management and development. Since entering the UK market in 2013, Greystar has built up a rental portfolio worth £2.8 billion by investing in new housing and student accommodation. Greystar has three multifamily developments underway in the UK:

  • Greenford in West London
  • Sailmakers in Canary Wharf
  • Nine Elms

In addition, Greystar owns and operates a boutique student accommodation brand – Chapter – which provides premium student living in the best London locations. Chapter has 4,456 student beds across eight sites.

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UK OBJECTIVES POST BREXIT

Whilst Greystar acknowledges that Brexit means change within the UK, Greystar remains committed to achieving its stated UK goals:

  • Become one of the UK’s largest operators of

rental housing

  • Increase its London portfolio to 10,000 rental

units within four years – this includes doubling

  • ur Chapter student accommodation portfolio

So far in 2017, Greystar has announced three acquisitions; Nine Elms, Chapter White City and the Quill.

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Source: Office of National Statistics, Moody’s Analytics

  • GDP growth has remained positive, albeit slower than many would desire, in the past three post-Brexit quarters
  • A notable difference in the UK’s economy is it’s inconsistency in the largest drivers of its growth, whereas the US in recent years has been

driven by personal consumption

  • Since the June 2016 Brexit vote, the pound has depreciated ~10%, making its products less expensive and spurring inflation

0.00 0.50 1.00 1.50 2.00 2.50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Exchange Rates

USD:GBP EUR:GBP 0% 1% 2% 3% 4% 5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inflation

U.K. U.S.

  • 2%
  • 1%

0% 1% 2% 3% 4% 5% 6% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Real GDP Growth

U.K. U.S.

  • 2%
  • 1%

0% 1% 2% 3% 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Components of Real GDP Growth

Personal Consumption

  • Govt. and Non-profit

Domestic Investment Net Exports

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THE BIG PICTURE IN THE UK

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LONG-TERM THINKING: POPULATION TRENDS ARE POSITIVE

Source: Office of National Statistics, Moody’s Analytics

  • 8%
  • 4%

0% 4% 8%

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

2015 United Kingdom United States

100 105 110 115 120 125 130 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Population Growth (Indexed to 100 in 2000)

U.K. U.S. London NYC 0.0 0.1 0.2 0.3 0.4 0.5 0.6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Population Additions (in millions)

London Other UK

13%

6%

Population Distribution (Top city as % of country)

Top City Rest of Country

Age Distribution

Outer Ring – US / NYC Inside – UK / London

  • Whilst the US outpaced London in population growth in the early 2000’s, London hit an inflection point in 2007 and has outperformed since
  • The age distribution of its population is largely consistent with the US, having larger young adult and nearly retired age cohorts
  • London possesses an outsized share of the UK population and recent gains indicate a continuance of this trend

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  • 1. Household requirements are estimated based on household characteristics

Source: English Housing Survey

  • The private rented sector has nearly doubled its market share in the UK since 2000, and London has experienced a similar trend

tacking on 11% over the last 10 years

  • The current private rented sector is insufficient with inefficient building design and woefully out-of-date stock—half of which being

built prior to the end of WWII

GROWTH OF PRS IS NEEDED

10 20 30 40 50 60 70 80 1918 1932 1946 1960 1974 1988 2002 2016

Trends in Tenure

Owner Occupied Private Rented Social Rented 23% 28% 49% 24% 17% 60% Social Renter Private Renter Owner occupied

London Trends in Tenure

2005 2015

Pre-WWI 34% Pre-WWII 16% Post-WWII 50%

PRS Building Age

16% 41% 39% 45% 41% 14% Supply Mix Demand Mix

Housing Stock v. Household Requirements1

1 BR 2 BR 3+ BR

Available for small households Desired by small households

Homeownership rate

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WHERE IS PRS BEING BUILT AND WHERE ARE THE THAMES ESTUARY HOTSPOTS?

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GEOGRAPHICAL OVERVIEW AND HOTSPOTS

WWW.GREYSTAR.COM

There are 95,918 build-to-rent homes in various stages of completion, compared to 69,824 in Q1 2017 (37.4% increase). Whilst London still leads the way in completed PRS units, the regions now have more build-to-rent homes under construction: 12,316 compared to 11,696 in London. Popular regional PRS locations include major cities such as Manchester, Liverpool and Birmingham. Key hotspots in the Thames Estuary region include Barking, which has several schemes underway, and the London boroughs of Greenwich and Lewisham also have major developments in construction.

*All figures taken from the British Property Federation

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WHAT ARE THE OPPORTUNITIES FOR PRS IN THE THAMES ESTUARY REGION?

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OPPORTUNITIES FOR PRS IN THE THAMES ESTUARY REGION

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Greystar has previously worked in the Thames Estuary region with its Chapter Lewisham student accommodation scheme. Looking ahead, there are a number of areas that remain on Greystar’s watch list, including the London Boroughs of

  • Newham
  • Havering
  • Greenwich
  • Bexley
  • Barking and Dagenham

All of these areas offer locations that fulfil Greystar investment criteria... Chapter Lewisham

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GREYSTAR RENTAL HOUSING INVESTMENT CRITERIA

Source: CBRE, Bloomberg, Greystar

Service

Integrated leasing and maintenance services for a hassle free experience Dedicated on-site staff to respond to residents needs quickly Continuous quality monitoring, allowing employee incentives to be tied to service metrics Consistent property branding to distinguish property attributes and service Focused on 1-2 bed units as well as studios, targeting single-living young professionals Purpose-designed, fully furnished flats of high specification Best in class amenities targeted to specific customer base. Examples include resident lounges, fitness center, business center, pool, cycle storage and maintenance facilities, cold storage, etc.

Product

Strong transportation links into the city crucial for professionals commuting daily to work Close proximity to lifestyle amenities such as shopping and leisure Attractive neighborhood and regeneration areas, characterized by high housing values, incomes, and educational attainment

Location

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LOCAL GOVERNMENT POLICY APPROACHES

Historically build-to-rent has not enjoyed a specific distinction within local planning frameworks. However, as build-to-rent becomes an increasingly deliverable tenure of housing, local government is beginning to change its approach.

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WHAT KIND OF ‘PLACE’ CAN BUILD-TO-RENT CREATE?

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KEY CONSIDERATIONS

WWW.GREYSTAR.COM

Every business model is different but at Greystar our goal is to create a lifestyle that adds value for our residents. Key considerations that are paramount to the long term viability, efficiency and success of build to rent include:

  • Understanding the local market and the specific needs of the customer
  • Amenities designed with their needs and preferences in mind
  • Build in flexibility, with open spaces where people can work, relax, chat with

friends or entertain

  • Amenity spaces that are designed to create the feeling of home
  • A management team to plan resident activities and events
  • Customer feedback and reviews that allow for continuous improvements
  • Communication is the key to providing excellent customer service
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DESIGN & PLACEMAKING

Key Principles

  • Purpose designed & built for long-term rental
  • Buildings remain in long-term single-ownership, under single

management

  • Design includes internal and external resident amenities, including gyms,

shared roof level clubrooms & terraces, etc.

  • Generous apartment sizes and ceiling heights exceed LHDG standards
  • No single bedrooms – to suit families and/or sharers
  • Sprinklers throughout allow open-plan apartment layouts
  • Ample circulation and back-of-house spaces to allow for effective

management

  • Efficient design for ease of construction, operation and maintenance
  • Quality landscaping to provide attractive environment for residents and

the wider community

  • Provision of appropriate community facilities and mixed uses to create

daytime activity

  • Promotes sustainable placemaking (as diagram)
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GREENFORD GREEN

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CASE STUDY: GREENFORD GREEN

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Block 3 For sale & shared

  • wnership

Block 6 DMR (Broadway Living) Block 4 BTR / multifamily New bridge (pedestrian) New ‘2 form entry’ primary school Block 1 Grade II Listed refurb.

  • ffice

Central Square Café / retail / hair Local grocery Block 5 BTR / multifamily Pub / deli / gym Block 7 BTR / multifamily Workspace / office Block 8 BTR / multifamily Café / retail / cinema Block 2 For sale & shared

  • wnership

New Health Centre Berkeley Avenue Existing buildings:

  • Ferrero UK
  • GSM

Café / yoga / cycles

  • Long-term, sustainable community
  • 1,965 homes in total
  • Mixed tenure, fully mixed use &

managed development

  • DMR affordable housing – new

tenure & mechanism

  • Amenities assist work / life balance
  • Faster construction than ‘for sale’
  • Quicker absorption and high levels
  • f occupancy
  • Post-construction jobs on site
  • Canalside living, connecting to

surrounding community & adjacent parkland

  • Create new landmark buildings
  • Public & stakeholder consultation
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GREATER LONDON SITE LOCATION

15 MINS 10 MILES 26 MINS

WEST EALING (CROSSRAIL)

13 MINS 6 MINS

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KEY METRICS

Previous planning consent (Nov-14)* Current scheme Variance Variance (%) Residential units 593 1,965 +1,372 +230% Retail/Commercial/non-resi. (sq ft) 70,633 230,810 +160,178 +225% Maximum height (resi. storeys) 3 to 9 7 to 19 up to +10 up to 110% Site area (acres) 13.8 21.3 +7.5 +54% Density (dwellings/acre) 43 92 +49 +115% Land basis £/unit 136,594 41,221

  • 95,372
  • 70%

(*) The site area for the previous permission was 13.8 acres compared with 21.3 acres for the current scheme

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GREYSTAR OPERATIONAL DIFFERENTIATION

Greystar

Property Operations

In-house management, leasing and maintenance, with dedicated teams on-site

Coordinate and execute repairs onsite swiftly, with clear and timely communication of progress

Implementation of industry leading reporting and accountability systems Tenant Experience

Continuous monitoring both of operational management and resident experience

Comfort and security of tenure with a dedicated rental

  • perator and owner

Staff

Highly trained staff specifically dedicated to one asset, improving responsiveness and visibility

On-site staff incentivized by metrics measuring service and

  • perational performance

Market

Property Operations

Disparate estate agent leasing process, with no dedicated management team in place

No repairs offered; tenants responsible for coordinating with multiple parties to remedy repairs

Integrated data systems usually not in place, with reporting conducted ad-hoc by hand Tenant Experience

Generally poor with residents left to fend for themselves

Little to no community orientation or interaction

No security of tenure Staff

Centrally managed or third party vendors

No accountability of staff for the quality of their service provision

Greystar Current Market Greystar’s operational experience is unparalleled in the UK market and will deliver the superior resident experience required to drive rental premium

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Michela Hancock, Senior Development Director, Greystar mhancock@greystar.com