In conversation with …. UKAA CEO Brendan Geraghty

A surfer turned architect, now leading the Build to Rent sector’s membership organisation, Brendan believes if BTR can articulate its social value proposition it can be a key to urban regeneration, drive the green agenda and ride the tricky economic waves.

Tell us a little about yourself and the start of your journey to UKAA

I was born in South Africa, in Durban, and grew up more interested in surfing than anything else. There were often stern words from my father and my head teacher as I was very good at having fun, but I was also always interested in design and the ideas behind design and was fascinated by architecture although there was a chorus of teachers saying: “You’ll never be an architect – we’re not sure you’ll ever even be a surfer!”

It was tough to be accepted into architecture at university, so I studied interior design instead. I found it hugely enjoyable and suddenly I thought ‘this is where I’m at’ but I also realised I needed to go and study architecture because that was where the ‘meat and potatoes’ was.

In the first week of the interior design course, I remember one of the lecturers asking: “What’s the difference between architecture and interior design?” Nobody really knew of course because it was so early in the course, but the answer is one of the most profoundly influential things I was taught: Architects design from the outside in, while interior designers design from the inside out. That is something I’ve carried through my entire career, and it has massively influenced my BTR design thinking.

At the time I was studying, South Africa was going through an escalating apartheid struggle, and I felt it was time to exit. I applied, as a mature student, to study architecture at what is now Greenwich University.

I felt that I had found my water but after the first year I didn’t have the funds to continue and so had to go back to South Africa. I applied to the school of architecture in Durban but despite having successfully completed my first year in England, they still refused my application. 

So, I took a year out, went surfing in Cornwall, saved enough money to continue my studies, completed the course and then went on to the Bartlett, the UK’s premier school of architecture.

When practising architecture, I came up with the concept for Build to Rent which was ‘brand before building’, an evolution of the concept of design from the inside out with a customer centricity.  A brand is not a product, it is an emotional language or wrapper that surrounds the product and communicates the value proposition and the values of the company behind the offer. 

I realised then that a creating a brand is an excellent brief for creating a building. The design process is very similar to architecture. Obviously, it’s a bit more technical in architecture but the basic principles are the same.

I peddled ‘brand before building’ around the marketplace and some of my architecture chums asked: “How can you be so superficial about what we do?” I think they missed the point, and 10 years on I’m pleased to see people quoting it back at me.

Brand in residential real estate is a very under-nourished thing, which is strange as we all need a home – the emotive word for a house. BTR is pioneering an understanding of the importance of customers and the creation of B2C brands – rather than B2B – and we’ll see the value of brands as an important part of customer acquisition and retention strategies. Ultimately, customer satisfaction is revenue protection.  

So why did you shift from a successful architecture practice to UKAA?

Basically, Geraghty Taylor Architects were Covid casualties. 

I didn’t really know this when we started, but because BTR tends to be funded by institutional investors, they like to have very strong covenants with the businesses they do business with. We were a small practice of around 23 employees and in architecture, once you get to 30 people you cross the threshold into ‘being established’ and into the next league. 

We were working to get to that point but first came Brexit, when the market started to close up, especially in BTR, and then came Covid, which really hurt. We went to a third-party investor who came in but was very traditional and didn’t really want to consider BTR or Modern Methods of Construction, another of my passions. I said, “I’m out” and set up my own practice, which is still going on a very small scale, called Centred Architecture. 

While I was with Geraghty Taylor, we published many thought leadership pieces and earned some really good exposure. I’ve often thought architects limit their creativity to buildings, while I was more interested in broader ideas and how to implement them. I wanted to show how design was not just an aesthetic or functional thing but part of a business proposition, so that is why I strayed out of mainstream architecture and looked at how we could use design to enhance a business strategy.

On the back of that, I became involved with the production of the UKAA’s Best Practice Guide. Then Dave Butler (then UKAA CEO) retired, which was a surprise; a number of friends said: “Mate, you should put your hat into the ring,” and here I am.  

What were your thoughts coming into your role with UKAA?

What I saw in BTR was an opportunity to combine product, place and community in a tangible and good-quality living experience. It has the potential to progress further up Maslow’s Hierarchy of Needs more than any other form of residential real estate.   

The broad church that is the UKAA membership – the lenders, the investors, operators, contractors, developers, advisers and suppliers – encompasses the full 360 degrees on what it means to deliver and manage a high-quality product. I see all that and feel there is an opportunity to unify and close some of the silos that exist between those elements in a residential development.

To put this into context, the way that residential buildings are procured through the market is heavily dominated by a sales culture with its pressure for a short as possible timeframe for a return on investment. 

We know BTR is an operational, long-income game whose funders are very concerned with product quality, ESG, Net Operating Income and are very aware of potential reputational damage.  These differences create much higher expectations for the performance of BTR buildings and we are seeing these longer-term performance criteria starting to change the culture of BTR development. There is still a long way to go before the operational brief fully informs the capital brief, but we have started the journey.  

In 2003, I did a post-grad thing with the Cambridge Institute for Sustainability Leadership which was brilliant.  Jonathon Porritt was our teacher, the cohort included some incredible people, and it looked at business operations and governance of the supply chain to see how to drive strategies for sustainable business. It demonstrated how to link business with the green agenda. This was a key moment for me as it showed how design could integrate environmental requirements with business outcomes. 

I mention this because it is now so much a part of the BTR market. Funders are under great pressure to deliver on the ESG agenda. This is also one of the reasons why I believe that the capital markets will deliver Net Zero far in advance of government regulations. BTR is at the forefront of that because of the scale at which we develop and operate.

Let’s bear in mind we’re early in our Net Zero journey, with very few buildings achieving this status.  There are no large-scale residential buildings that have achieved Net Zero, only very few have come close.  I am aware of one or two BTR buildings aiming for Net Zero in use. This will be very challenging given the complexities of residential design;  embodied carbon is the next step but that’s a much higher level. 

If, for now, we stick to Net Zero in use, the scale at which we operate – it’s not unusual for BTR to produce 500 homes in a development – is a huge opportunity to use the size of our projects to scale green technology for residential design. Over the past 20 years Photovoltaics have improved their performance, reduced their cost and significantly increased their application. We need more technology to take a similar journey. The BTR sector could use its scale to be leaders in this area. 

What are your ambitions for UKAA?

I think we are strengthening the position of UKAA and articulating its place in the market; we’re a young organisation and we are delivering on a manifesto, a strategy for growth, and setting an agenda which we will renew again at the end of this year.

If you ask: “What’s the job of UKAA?”, it’s to support and advance the sector through all reasonable measures. We’ll create and distribute high-quality information (which we do through the Best Practice Guide and our webinars), and expand the membership, especially the investors and lenders who influence the development brief more and more, because of ESG requirements and what they are prepared to fund.

Money tends to always get what it wants but we’re starting to see that BTR suits more patient capital, and they are making more and more demands on what they want to see in terms of the performance of the building.

We will continue to attract operators; we were ostensibly created to represent operator interests but if we and the industry are going to be honest with ourselves, things have evolved so much that to limit ourselves to the operating piece is not practical. Given the powerful role of funders in the BTR dynamics and their need to influence the performance of buildings through ESG and NOI objectives, they have an increasingly important role in the UKAA and are a key membership target. 

The UKAA will seek out opportunities to improve the integration and co-operation between investors, developers, operators and the supply chain. Our mutual objective has got to be to drive quality, efficiency and value in the BTR economy. Our various working groups, forums, hubs and committees are mandated to deliver on these common goals. 

So, we need to expand the membership and we will start to lobby independently to Government, collaborating with the BPF while pursuing our own pathways and articulating our own needs. 

Something which will help us do this is that we are currently fundraising to create a BTR Code of Practice. It’s vital for the sector because the investment argument for BTR is very well made but the conduct and the social value of BTR is not well articulated.  The Code of Practice will codify the core values of BTR that set the sector apart from the PRS and enable stronger positioning with Government and local authorities.

The Code of Practice, which we hope will become a kite mark, is a maturation point which will explain what people can expect from us, not necessarily from a particular product (which is important too) but what they can expect from us as a sector.

BTR must articulate its social contract. We’ve already articulated our investment contract and now we must articulate our social contract, which shouldn’t be a scary proposition. 

The very nature of long-term buildings of homes, and the desire to create community, suggests we have already shifted the emphasis from build-sell, -move on to build-hold-look after. Housing associations are lauded for their social contracts, and so they should be, but they have their roots in time; they invest over time in their residents, in their communities in their stocks and that’s no different in BTR.

Our social contract will not be the same as theirs but if you live in a BTR building by people who have signed up to our Code of Practice, you can expect this level of behaviour and this level of product.

What gives you sleepless nights?

I worry that we are simply not producing sufficient homes of all types, and this is going to have a significantly negative impact on our nation’s future. BTR has a big role to play, particularly as we build at scale and not at the pace of sales. 

I also worry that getting viable schemes in BTR is tricky with the current economic headwinds and investors could simply look elsewhere. 

Although these economics will pass in time, we have got to keep the participants in the sector motivated to ride the difficult waves and be ready for more benign waters when they come. 

I worry also that the sector doesn’t recognise the importance of articulating our social value because I think that will eventually hold the key when it comes to value gateways like planning. If we can explain the social value of BTR we have a much more complete narrative.

In pursuit of this, the theme for our conference is BTR: The Transformative Value of Investing in Homes and Communities. It’s a broad sweep but we wanted the social value aspect to be oxygenated more than it has been, and we’ll be using the end of the conference as a dynamic to inform the manifesto for next year.

As my general thinking has crystalised, it’s that BTR has become the anchor tenant in regeneration. Placemaking is important and is great, unless you don’t have people, in which case it’s not great at all. 

BTR doesn’t build at the pace of sales, it builds a block or the first homes in a development, says ‘please come and live in these homes’ and works very, very hard to create that community. From the regeneration perspective, for both urban and suburban BTR, it’s the new anchor tenant, where it used to be retail or offices.

Once you have a slug of people in an environment you can plug other things into it – it’s not a panacea for the housing crisis but it has a very rich offer which needs to be done well and done appropriately.

If you are looking at the regeneration of towns and cities with BTR at its core, we will prove not just the investment value of BTR but the social value.

The UKAA’s mission is clear: we exist to empower and elevate the BTR sector. We serve our members, working tirelessly to drive the sector forward and secure its future. I want UKAA to maintain our relevance and evolve. We must evolve if we want to be champions of BTR and we must grow with the sector and remain valuable to all stakeholders.