The theme at MIPIM 2019 was “Engaging the Future”. In real estate, most of us will immediately think of the new PropTech initiatives. But look at the definition of innovation and you see it is “a new thing or a new method of doing something"
At Geraghty Taylor, our watchword is "Create Differently". Doing things the way the industry has always done them is simply not good enough for us. Sure, when that approach was used for the first time it was the best option, but you know the saying credited to Einstein; “doing the same thing over and over again but expecting different results, is the definition of insanity”. Guess this makes us disruptors!
BTR is a case in point and needs new approaches. If we thought in the traditional way we would end up with sub-optimal, adapted "for sale" units, lacking the crucial components of community, amenity and service. With these in mind, let’s think about two key areas in the BTR context; brand and offsite construction.
We see innovation, clearly, in our methodology; #BrandbeforeBuilding, which takes a critically different approach. Until we have established a complete business identity for the project we don't even think about design. To us, this radically different approach to defining the traditional project brief is as much a disruptive technology as any software app.
From the outset, we consider the needs of all the stakeholders in the project and look to deliver acceptable dividends to them whether these be measured financially or otherwise.
Planners and city leaders will be looking for places that add to the community and ease pressure on housing. Investors and operators will be looking to the long-term financial returns; not just simple gains on sale at completion. And, of course, the occupiers want to be treated like customers and feel that they have truly found “home”. Increasingly, we are realising that these apparently differing requirements are actually fully complimentary.
Defining brand critical elements is so powerful in controlling the construction process. Value engineers throughout this process know what they can and cannot touch and so don't undermine those dividends.
The use of offsite techniques is also a perfect example of innovation in BTR. There is great synergy between BTR and offsite methods, particularly modular volumetric. BTR is a solution aimed at providing residential units at scale and benefits from rapid delivery. It gets heads on beds in the shortest time. Modular delivers this speed of construction and high-quality components for comparable price. As odd as it sounds, this speed of delivery can conflict with the aims of the housebuilder who often artificially controls supply in order to manage values through the sale cycle. This is one reason why modular has seen slow take-up, despite the ever-worsening conditions in the construction industry. (see The Farmer Review – “Modernise or Die”) #MODIE
We see off-siting not as a procurement decision but as part of the business strategy. All our buildings are designed to be compatible with offsite techniques though all can be built traditionally. We will increasingly see BTR developers using modular. Greystar, for instance, is currently building the world’s tallest modular buildings in Croydon. They are procuring their modules from the UK. Other clients we are working with are looking to import units into the UK from further afield. It could well be that your next bedroom will find its way onto these shores on a container ship from the Far East. Some forward thinkers, like L&G, are even making a substantial investment in securing their own procurement source. Legal &General Modular Homes have created their own factory in Yorkshire.
You will no doubt have seen some amazing new PropTech at this year’s MIPIM but innovation is not all about apps and software. The most powerful tool of them all is in your head.
So think and Create Differently!