Facility managers and the Build to Rent market

Build to Rent is an emerging yet widespread trend in the Australian property market, with many developers shifting gears and transitioning from a Build to Sell (BTS) model to a Build to Rent (BTR) model. With this wave comes a shift in the risk that property developers hold as rather than offloading projects after they sell, BTR will see them hold assets for 25 to 40 years or more. 

Traditionally, developers are great at doing their due diligence but there are stark differences between a BTS model and a BTR model. With the former model, developers will look at the numbers at the front end and once it’s sold and complete, it’s onto the next project. This approach means they don’t often have an integrated focus on the ongoing operations of the buildings they develop because simply put, they don’t need to. However, BTR means developers need to prioritise what the building will look like and how it will run both once complete and 40 years down the line. It’s essential that developers consider general wear and tear during the front-end design to ensure they can maximise their profits across a long lifecycle.

Facilities Management will be more important than ever before, particularly as the number of constructed build-to-rent units are forecast to double each year to 2025. Facilities Management teams will ensure developers feel supported by doing their due diligence and understanding how to maximise the operational efficiency of their assets. This includes the longevity of not only apartment fixtures and finishes, but overall maintenance of the design including common areas. This is also why we are seeing BTR platforms putting a greater emphasis on sustainable practices than traditional BTS projects as these can minimise outgoings and running costs.

If developers approach BTR projects in the same way they approach BTS projects, a number of issues will arise. Facilities Management experts need to be brought into the conversation from the very start. There are a number of reasons for this, namely, we can forecast operational costs and problems that will arise throughout the project’s lifecycle. FM experts will work with developers to map out a 25-year model of how much the building is going to cost to operate, factoring in what year replacements are forecasted to be required and how much ongoing maintenance of machineries such as boilers and chillers will cost.

When it comes to appointing a builder, it can’t be approached in the same way as a BTS model, either. Builders will always seek to maximise their profit and this can diminish the operational efficiency of a whole building over a 25 to 40-year lifestyle, particularly if the materials chosen at the start are not considered for longevity.

In the same vein, developers can’t rely on their networks to understand BTR, it is a completely different ball game to BTS. Yes, they will have their networks of preferred suppliers but this isn’t enough on its own and why the experts in Facilities Management need to be brought into the circle of trust. We’re still in the early stages of the BTR market with Melbourne’s first project only opening its doors last month and only time will tell who gets it right from the get-go.

Dyan Sisouw is the Director and CEO, Enviroscope.