Can you tell us a bit about Goodstone Living and its offer in the Build to Rent market?
Good to speak to you and of course. Goodstone Living is a specialist development and investment management business focused on the UK Build to Rent market.
Our focus is on delivering the next generation of Build to Rent schemes in London and the key regional cities and so far we have acquired two sites – Camp Hill Gardens in Digbeth, Birmingham, and Skyliner (now known as Dockside Leith) in Leith, Edinburgh. Both are brilliant projects and we have a deep pipeline of development opportunities.
Camp Hill Gardens is at the heart of the creative quarter in Birmingham, often described as Britain’s second city. There will be over 500 homes, 22,000 sq ft of amenity space and Birmingham’s largest private garden – measuring over one acre.
Skyliner is in Leith, a vibrant waterfront district about ten minutes north of Edinburgh where there will be 340 homes and 16,000 sq ft of amenity space. This thriving residential community is located in the waterfront district with unparalleled views across the city.
We want to create a better way to rent. This means designing, delivering and operating the next generation of rental communities designed around three core principles: better homes; bigger, better spaces; and better, simpler service. Our Birmingham and Edinburgh projects are just the beginning.
You are backed by Macquarie Asset Management. What role do institutional investors have to play in Build to Rent?
Build to Rent requires a different mindset to traditional residential development. It is a long term investment in which there are real benefits to investing in both the quality and sustainability of the built environment. This shift to an institutional mindset creates true alignment between owner developers, like Goodstone Living, and both its residents and the broader community.
This future-proofing approach to development is critical to succeed in the Build to Rent sector, but is also important in delivering truly sustainable outcomes that we all know are at the top of the agenda for government and regulatory stakeholders, real estate investors and, most importantly, residents.
We saw an interview in which you spoke at length about amenities. Can you tell BTR News’ readers about your stance?
We are not interested in participating in the amenities ‘arms race’ that some of our competitors are chasing. Our major focus is on resident wellbeing and more particularly, providing better access to open and green spaces to enhance the environment for our customers to live, work, play and relax.
We will have rooftop terraces, gyms and co-working spaces at both of our schemes and they will be an important part of the overall offer, but it’s equally as important not to lose focus on the less ‘glamorous’ amenities, such as parcel storage, and actually providing bigger and better homes.
Goodstone Living considers the customer at every stage of design, construction and operations, assessing whether those amenities will actually be used, the operational costs of providing them, and the holistic impact on scheme design. That’s what true ground up design is all about.
What are the biggest challenges and opportunities facing the Build to Rent sector at the moment?
Good question. In an increasingly competitive market, we are finding that we need to be more selective on our site buying and leverage the relationships that Darryl and I have built over the past four decades. It does help that we are really specific with what we’re looking for because Goodstone Living has a clear identity and we won’t go near sites that don’t align with that.
The planning system is still complex and you really need to know what you are doing to navigate it successfully. Build to Rent has been around for about a decade now and the policy landscape hasn’t really kept up, despite the fact that Build to Rent is now a proven concept. You would think that the policy environment would be more responsive to soaring interest from real estate investors and most importantly, the new generation of renters, but that’s just not happening at the moment.
The current economic environment is both a challenge and an opportunity. Inflationary pressures need to be carefully managed during delivery; however the sector’s history of resilient income streams are in high demand given they are needs based and typically more correlated with inflation than the economic cycle.
The good news is that our senior leadership team, bolstered by Macquarie Asset Management, has navigated our fair share of economic cycles. It is in times like these that specialist development partners that have a clear understanding and deep experience of how it all works are invaluable, as you need to know how to manage build costs without sacrificing the quality of product and by extension, demand. Otherwise, inflationary pressures could very quickly turn against you. That experience and knowhow was a big part of the team at Macquarie Asset Management’s thinking when it launched Goodstone Living.
How do you think the industry has responded to the ESG agenda and is Goodstone Living doing much in this area?
Very well, actually. Real estate hasn’t always been front and centre when it comes to adapting to change, but that’s no longer the case. ESG is non-negotiable and I think the real estate industry was one of the first to wake up to that.
From our perspective, we are certainly seeing it as an opportunity to lead the industry. All of our schemes will be targeting at least a 50% reduction in operational carbon compared with current building regulations.
We’re also doing a lot in the social value space and ultimately our schemes are all about creating new neighbourhoods and communities not just for our residents, but the wider local community too. For example, we’re offering local businesses 50% discounted office rent at our scheme in Birmingham.
Technology will also be instrumental as it allows us to develop data sets that can be used to really understand our residents, their carbon footprint, and the way in which they live, work, play and relax. That way, we can nudge them towards a more sustainable way of living.
The Build to Rent sector is in a strong position to deliver on ESG initiatives, as by definition, it is newly constructed in-line with the latest trends and building regulations. This provides an opportunity to invest both into the fabric of the building and into the local community – both of which we are doing at Goodstone Living.