How Smarter Asset Management Drives Cost Control, Compliance, and Efficiency
With asset performance under increasing pressure, we spoke with Caspar Courage, Director of Rental and Later Living, about the challenges the Build-to-Rent (BTR) sector is facing, and how better asset management can make a real difference.
What are the biggest challenges facing asset management at the moment?
“The biggest challenges facing our clients in the build-to-rent sector are development. It's a really challenging development market at the moment, people are finding it really challenging to deliver new schemes and as a result of that we're just seeing more and more and more inquiries from investors and operators looking to really review and drive the performance of their operational assets."
“We're very much reacting to that through the launch of this asset management service. We really understand that there's a need for investors to better understand the performance of their operational assets and we've reached a point in the sector where assets have stabilised, the sector has reached maturity and people have got a really strong view that they need to review the performance of those assets with a view to improving that.”
How has the increase in operational costs impacted the sector?
“Operational costs have increased beyond anyone's imagination over the past few years. In a service charge context, that's putting huge pressure on leaseholders. In a build-to-rent context, it's really putting a lot of pressure on the viability of build-to-rent schemes and particularly the performance of those schemes."
“People talk a lot about this 25% gross net attrition number. The reality is that we know most operators are really struggling to achieve that unless they're operating at significant scale. What we're trying to do is review the schemes that people do have that are operational in the context of their competitors, allow people to benchmark their schemes' performance against similar schemes and help them understand how they can improve and drive that performance both for the benefit of their operational cost position and also the experience of their customers.”
How can better asset management improve cost control, compliance and overall efficiency?
“In terms of how better asset management can improve those efficiencies across compliance, operational costs, building performance, I think a lot of it is just about really understanding the performance of assets from the get-go. So I think what we can do as a third-party advisor as opposed to internal asset management teams is provide a context to the market. How are those schemes performing against schemes nearby?"
“I think it's also about taking a step back. A lot of schemes will have reached maturity and whilst people have been very focused on development and trying to pursue new opportunities, schemes that have reached maturity now, they're in a position where they might be exploring their operational partnerships. Trying to understand whether there's opportunities to explore new partnerships, whether or not they should be working with their existing operational partners or their internal operational teams to drive performance."
“We've been instructed, for example, on a compliance basis by a large bank—we undertake regular compliance audits for them of all of their rental portfolio on a monthly basis. Without that information, it's really difficult for them, sitting there as the client, to understand whether they are acting in compliance with the relevant legislation."
“Similarly, we've got a client who's got 60% occupancy across their portfolio. Again, that's a huge number and a huge void position. And what we're really trying to do is help them understand how they can minimise that and how they can drive the performance on a whole scale perspective. So, from the design and specification of the apartment, right through to rent setting and leasing and marketing strategy work. Again, it's a sort of wholesale perspective from a third party, helping them to take a step back, reflect on their asset management strategy and drive the performance of their portfolios.”
What sets SAY apart in its approach from traditional property management or asset management services?
“We've got a really good breadth across the market, so we really understand how our clients' competitors are managing issues. We've got a huge amount of operational data, again across different portfolios, which we can draw on to benchmark people's performance."
“Again, it's all well and good saying we're running a BTR scheme at 27%. How does that compare to similar schemes? What are other people achieving? I think, again, we're a third party. We don't want to manage anything. That's always been a huge USP for SAY, and I think that what that allows us to do is deliver strategies which are really tailored to the client and their portfolio and not based on a certain way that we would like to drive that."
“Having said that, a huge part of this is working very closely with operational partners. We don't want to take away the work of the operational partners. What we'd like to do is bridge the gap between operational partners and investors to help them work in a more seamless way to drive the performance of the portfolios.”
Whats the next step?
“The first step is just to get in touch with us. We've got a team here ready and waiting. We have really been working hard to design this service and to identify where the needs are of our clients and increasing their operational performance. And so yeah, just get in touch.”
