Build-to-rent market leader Grainger on why it's backing Yorkshire

Build-to-rent is booming thanks to millions being poured into a sector that is seen as a long-term safe haven with steady returns.Planning departments in Britain’s biggest cities are being deluged with applications for the rental only, amenity-rich apartment blocks, though some critics see them as a bandwagon that may not deliver the incomes promised. Read More-> on build-to-rent in YorkshireHelen Gordon, a chartered surveyor and CEO of Grainger plc, the market leader in the UK’s nascent build-to-rent sector, has no qualms about pursuing more opportunities.The company, whose head office is in Newcastle, launched its first scheme in London in 2015 and has six completed apartment blocks in a variety of locations including Bristol, Aldershot, Hampshire and Bristol.There are another 17 schemes with 8,000 flats in the pipeline, including three in Yorkshire. All include facilities such as shared lounges, gardens, workspaces, cinema rooms and a concierge.Ms Gordon is not someone who jumps on bandwagons having secured the top job at a successful firm that has specialised in homes to let since 1912, when it set out to acquire and manage tenanted residential properties. It is now the UK’s largest listed residential landlord.

It all adds up

She has “done the math” as they say in America, where build-to-rent has been a big success. Her team is rigorous in researching the cities it believes to be good candidates for the apartments.One of its most compelling statistics is that there are now 4.7m rental households in the UK. This has increased by 74 per cent in the last decade and is set to rise to 7.2m by 2025.“We are very disciplined. We look at the demand in a city and map it against other indicators, such as economic and population growth, house prices and other factors,” says Ms Gordon.One of the key things she looks for is graduate retention as young graduates are most likely to embrace all that build-to-rent has to offer.“Manchester retains 58 per cent of its graduates and they stay for a long time,” she says. “Sheffield also has a good retention rate of 42 per cent but a large percentage of graduates move away after two or three years.”She adds that Leeds ticks a lot of boxes under the old system of scoring, which is still taken into account. “It has teaching hospitals and that is good for the rental market because doctors move around. It has a good university, which means there will be post-graduates and lecturers who want to rent and it has the top accountancy firms, which indicates that there is a good business base in the area with plenty of young professionals. It’s also got businesses relocating there and strong new industries, especially tech., which will bring more renters.”

Opening soon

Grainger’s Yorkshire build-to-rent projects include the site of the old Yorkshire Post building on Wellington Street, where there be 242 flats, and Fabrik in Holbeck which will have 216 rental homes.In Sheffield, Grainger’s Brook Place is set to be the first build-to-rent project to open in the city. Its 237 furnished apartments will be ready for occupation next month and leases are available now. There will be a concierge, rooftop terraces, a gym, a residents’ lounge, co-working space and an “experience” kitchen and lounge, which can be used for events. The apartments are also pet-friendly.Buying is still just about feasible in these cities and their suburbs, which means renting may not be a necessity but that’s where “the math” comes into play.“We are not saying that home ownership will disappear but there will be periods in people’s lives when they want to rent as they choose to move for work.“Plus, people are staying longer in the rental sector before buying a larger home,” says Ms Gordon, who adds that good accommodation to let plays a vital role in the success of a city that wants to attract and retain talent.

No contest

She has no concerns about competition in the sector and says that price, design and management give Grainger the edge. Its occupancy rate is 97 per cent and the average length of stay is 27 months“We offer good value. The average price per square foot for apartments in Manchester is £28 to £30 but ours are £18 and we have some at £12.“We also make sure we have superfast broadband and we manage all our own buildings in-house so the experience is better.“Part of the role of our concierges is to build a community so they will start the book club and encourage activities. It makes good business sense too as if people have friends in a development they are less likely to move.”The future for Grainger includes finding more sites in Leeds and Sheffield and its native Newcastle. It has just signed a partnership deal with Transport for London to develop build-to-rent schemes on land around tube stations and is considering more family-size build-to-rent in larger towns.*Brook Place, www.brookplaceapartments.co.uk