This year, Moda Living launched the second phase of its flagship Build to Rent scheme – Angel Gardens in Manchester. And despite Covid-19, construction continued on its development sites.
Moda has a pipeline of 8,000 new homes with a combined GDV of £2.5bn – which is growing. We spoke to Johnny Caddick about Moda’s progress and the future of the Build to Rent sector.
How has the business coped with Covid-19?
Primarily, the team has been amazing. I’m very lucky to lead a terrific team of 40 who responded immediately to the obvious challenges that Covid has presented us as a developer and operator of next generation neighbourhoods. We were able to seamlessly pivot to remote working using Microsoft Teams and solve some of the obstacles we came up against.
The biggest worry was whether we would be forced to halt construction, right at the start of lockdown. As a developer and contractor, when you have hundreds of tradesmen working to tight deadlines on numerous sites across the UK you look at your cash flow and think: ‘Crikey, if all this stops, what happens?’
But the government was very good in allowing the industry to keep going. They understood that once you stop on a construction site now you cannot just press play again. Most of our projects are progressing nicely, it’s only in Scotland where the programmes have fallen back slightly.
We decided to use lockdown as a time to really grow within the living sector, because there are so many opportunities. We have been busy across all areas of the business which is great.
How will Covid-19 impact the Build to Rent sector in general?
There is a huge appetite for Build to Rent and the residential sector more broadly and I think Covid-19 and 2020 will be remembered as a catalyst for Build to Rent; it has accelerated the trend where people want to live in high-quality, well-managed environments where they are well looked after.
Investors have been attracted by the granular income and rent collection rates across the sector – which have been fantastic (96% between January and August for Moda). So, the sector has proven its defensive qualities and as a result institutional appetite is growing. We know there is demand from our customers out there, so it’s fitting that there’s now an obviously increasing investor demand. This will be a stimulant for the growth of the whole living sector.
How have you looked after your residents at Angel Gardens?
We followed government guidelines about amenity spaces and thought hard on our feet about how to keep residents together and motivated. Our health and wellbeing strategy has been core to our business DNA from the start, but that has really come into its own during Covid 19. Using our digital platform and the MyModa app, we sold out 100% of our 78 virtual events – including pasta making classes, beer tasting and balcony fitness sessions. We had over 33,000 app engagements during lockdown. We also launched our parcel locker system last month, receiving 1328 parcels in September alone with none lost using the system.
Where are you at with other Build to Rent schemes?
We have a pipeline of 8,000 new homes in the UK, with a combined GDV of £2.5bn and growing – and the aim is to have 10,000 residents by 2025. The Lexington in Liverpool will open next year, and we’re on site for The Mercian in Birmingham. Leeds and Edinburgh are also on site and work will start on Glasgow in the coming months.
We have permission in place for Brighton & Hove now and work on that will start in Q1 2021. It’s a fantastic location and our first neighbourhood not in a city centre location. One of the things that Build to Rent is realising now is that you do not necessarily need to be in the heart of an urban environment – some people want the proximity but with some distance.
How is Moda’s ESG strategy progressing?
ESG is a very broad subject isn’t it? Environmentally during the build phase, we work with contractors who share our vision for sustainable procurement to ensure that the materials we build with are environmentally sourced.
As a company we’re targeting net-zero carbon. We can contribute to the national housing crisis with sustainable homes. Only a fraction of emissions come from the construction phase – most are operational.
By working with Utopi on green energy provision, saving and storage initiatives, Samsung for low energy white goods and other carbon offset partners, we can counteract the emissions generated during the construction phase. This translates through to our residents’ who have access to eco-friendly amenities such as eco cleaning products, car clubs, a bike cafe and we have also banned the use of single use plastics.
On the social side our health and wellbeing strategy is built into everything we do, from how we find our sites, to how we service the residents who will live in them. We believe that by using Smart IoT data, we can change the way our buildings are built. Smarter, greener more efficient buildings are sustainable and more valuable, and consequently more attractive to investors. ESG is high on our agenda, and I think our focus on proptech and vertical integration is going to play a big part.
What will we see from Moda next year?
We have some very exciting announcements coming out across the piece. I think we will see a lot of growth in the Build to Rent market and living sectors. We’ve been investing in the infrastructure for years now and we want to capitalise on our market position as one of the early movers in the space. It’s going to be the most exciting year for us to date, so watch this space.