UKAA Manchester Roundtable: Operating Structures, Recruitment & Talent Management In The Northwest Build To Rent Sector

IN ATTENDANCE Joe Webb – Bouygues UK – Construction Engineering Company Matt Halfpenny – Property Recruitment Company – Recruiter Will Sargeant – Property Recruitment Company – Recruiter Lee Hill – JLL – Property Management Company Vicky McCarrick – Dandara – Estate Agents Susan Bennison – Law Firm Kevin Watson – PLATFORM_ – Investor, Developer, Operator and Asset Manager Katie Davis-Maxwell – LGIM Real Assets – Real Assets Managers Marvin Chik – HawkinsBrown – Architectural Practice Samuel Fitz-Hugh – Settio – Estate Agents Matthew Finch – EcoWorld London – Real Estate Developer Andrew Egerton – Hunters – Estate Agents Ashley Perry – LIV Consult – BTR Consultancy Sarah Quinn – Moda Living – Property Development Company Jane Yates – Savills – Estate Agents Jason Weafer – ista Energy Solutions – Energy Management Company Vivian Hoelzl – Greystar – Integrated Real Estate Company Jennifer Bendik – Manchester Life – Real Estate Developer Emma Bonham – HML Group – Property and Estate Management Company Alison Hague – Chatham Hiller Architects – Architectural Practice Leanne Hargreaves – urbanbubble – Property Management Company Ed Howe – urbanbubble – Property Management Company   BtR in the North The emergence of Build-to-Rent (BTR) is reinvigorating the Northern residential property market. With 14 schemes already in operation – and 16 more going under construction – cities such as Manchester, Leeds and Liverpool are bracing themselves to operate over 18,000 BTR units by 2020. These institutional investor-owned schemes present huge opportunities to improve customer care for residents. But operating BTR schemes also presents its fair share of challenges, many of which are new to an industry accustomed to the traditional model that focused on managing buildings not people. With this in mind, Michael Howard, Executive Board member of UKAA and owner of urbanbubble, invited industry players to a round table at urbanbubble’s Manchester Head Office. It was an opportunity to share experiences in managing these operations, discuss what was going well in the sector, and what we need to focus on in order to overcome key challenges… Following introductions, urbanbubble’s Research Analyst, Ed Howe, set the scene for the Northern Powerhouse by looking at BTR in key cities across the North. Manchester is a clear front-runner, with nearly 2,000 apartments already complete and 5,300 under construction. However, Liverpool’s market is catching up, with the highest number of schemes in the planning stages. Leeds, Sheffield and Newcastle don’t attract as much attention, yet a few prominent schemes from the likes of Dandara and PLATFORM_ – both of whom were in attendance in the room – offer some interesting insights on the roll-out of BTR across the North. So, how are these single ownership schemes being managed?   A look at operating structures As the round table host, Michael kicked off the conversation by sharing his experience engaging with L&G to manage The Slate Yard. He noted that whilst in the US industry statistics show one full-time employee for every 44 apartments, urbanbubble have one for every 30-35 apartments. These jobs span from concierge and cleaning to resident services, leasing and property management, all based on-site. Michael points out the significance of this: it’s important to consider operations right from the planning stages so that toilets, changing rooms and refreshment areas are incorporated into the building design for staff. “These are a place of employment as well as residency.” – Michael Howard, urbanbubble Having consulted with L&G during the planning for The Slate Yard, urbanbubble then moved into mobilisation and on-boarding. Appointing a general manager as early as possible was critical to this stage, as they become the anchor of the mobilisation team. Their recruitment strategy for on-boarding BTR schemes starts with the GM appointment 12 months from practical completion and allows for a three month induction and training programme before going on-site and recruiting key team members such as the resident services manager and on-site property manager. With the mobilisation team in place, the focus was on getting the building ready for leasing and providing great customer service on-site. But Michael was keen to hear how others approach this… Lee Hill, Director of JLL, pointed out that not all operators are involved in a scheme from the planning stages. The GreenGate development was originally a 497-unit Buildto- Sell scheme which was converted to BTR and works well because of its scale and amenity offering. Currently, JLL are advising on a smaller scheme in build where they have been able to influence changes to be made that have been overlooked, as sometimes schemes look good on paper but not in working principal. Whereas urbanbubble has expanded its offering from block management to include lettings for an all-in-one customer service delivery, JLL currently approach these projects through joint ventures with two block managers nationally. JLL operate the front-end team with on-site property managers, scheme hosts and support from their offices, whilst the block manager partner is responsible for ensuring all of the other aspects are covered. “Whilst we don’t currently have a residential block management arm, we believe that partnering with a preferred agent offers the client a best-in-class service.” – Lee Hill, JLL The debate of whether to offer a 360 solution for operations or separate out then different strands stimulated some interesting conversations around the room.For Matthew Finch, Head of Asset Management at EcoWorld London, it doesn’t make sense to combine them all. He noted from experience that momentum coming in from lettings has a knock-on effect on property management, which can possibly create a conflict of interest. Breaking up the roles and channels has been much more successful in schemes in London. That said, Lee Hill made an interesting point on the scale of the schemes being discussed around the table, with some of the smaller schemes in London being dwarfed by schemes of circa 500 units in Manchester. To put this in context, Jennifer Bendik, Head of Lettings at Manchester Life, shed light on the model they run across their rental sites. They have a 24-hour concierge controlled by a front of house manager who sits centrally within Jennifer’s team. The focus is on the continuity of customer service for every resident and across every building. This 360 view is critical to building a sense of place and community. “If you can get front of house right – people who are bought in and want to learn – it makes all of the other stuff a lot easier.” – Matthew Finch, EcoWorld London Creating community is something that everyone in the room agreed to be the primary outcome, and for this, you need to get the front of house right. Finding the right people This turned the conversation to recruitment, and it soon became clear that many people in the room had encountered issues in getting the right people in place. The unique nature of BTR schemes means that experience in property doesn’t necessarily translate to successful placement on-site. “People underestimate how demanding it can be in a BTR environment. As well as being a fast-paced city for lettings, the added complexities of working in-house in a largescale scheme can be too much for some property managers and we have seen a few come and go.” – Lee Hill, JLL When you turn on a new scheme for the first time, only then can you know if it works or not. Dealing with these issues can be overwhelming, and if the residents don’t like the people on-site, you have an even bigger problem. “Hiring outside of the norm is indicative that BTR is completely different to PRS.” – Ashley Perry, LIV Consult For this reason, many employers have begun exploring talent pools outside of property, especially customer-facing ones such as hospitality, travel and even the police! As it happened, several people in the room reported great experiences in hiring ex-police officers who are good at thinking on their feet and calming situations down. “Hiring outside of the norm is indicative that BTR is completely different to PRS.” – Ashley Perry, LIV Consult In light of this, some companies are returning to competency-based interviews, ditching the traditional route of hiring people in favour of finding individuals with good people skills who can be trained up for the job. “You can teach property management – we’re not working in the rocket science industry!” – Jennifer Bendik, Manchester Life Scaling the BTR model But how do you scale a team that puts customer service and community at its core? This is a question that Kevin Watson, Operations and Commercial Director at PLATFORM_, raised and which stimulated some interesting feedback from those around the table. Vivian Hoelzl, Community Manager at Greystar, put the topic of scale into context by noting that every scheme is different, so there isn’t a one-size-fits-all approach. However, she did highlight three key phases in the life-cycle of a building that require very different skill sets and therefore might initiate changes in the structure of a team: mobilisation, leasing and stabilisation. Each phase can benefit from changes in the team – not just to strengthen the skill set, but also to prevent the existing personnel from going stale. This is crucial if a building is to be managed in the best possible way. “There’s nothing wrong with someone being naturally sales or customer care! Play to the strengths within the team.” – Vivian Hoelzl, Greystar Vivian Hoelzl from Greystar quite rightly pointed out that it does get busy on the ground quite quickly – which makes getting the right people in place early important. On this point, Sarah Quinn, Head of Residential Operations at Moda Living, reinforced the importance of recruiting and training a good general manager at the beginning stages who can, in turn, train the rest of the team. “If that key appointment isn’t made, the building could fall away very quickly.” – Sarah Quinn, Moda Living Looking to the future The conversation continued to flow well up until the close of the session – and during the study tour that followed – discussing everything from policies around pets to educating local authorities on what the sector is and what it needs. As Michael wrapped up the round table, he pointed out the importance of the UKAA in tackling these big question marks surrounding what is a very new industry, and supporting the players within it. The topics raised at the round table will feed into plenty more UKAA events over the coming 12 months, including the annual conference in October and the trade show in February, and he encouraged attendees to come forward with ideas on how UKAA can further support the sector.