17.10.2019, 12:37
Demographic Data Key to Successful Build to Rent Communities
UK Institutional landlord revenue enhancement partner Houzen has created a unique algorithm to unlock tenant demographic data (TDD) for investors and operators.
With so many build to rent schemes springing up across the UK – there are currently 36,410 units under construction and 74,366 with planning permission according to the British Property Federation (BPF), creating successful communities is an increasing priority for those operating them. One approach which has produced impressive results results is to create ‘cultural ambassadors’ who are keen to spread the word about their accommodation and its welcoming social scene – and deliver revenue faster and for longer at lower renewal costs, as a result.
At one build to rent site in Canary Wharf, for example, Houzen has been helping deliver tenants with more rental offers compared to local market stock and using tenant data to bolster the sales process.
The build to rent revenue generation company’s data analysis means it can predict the length of stay against specific demographic choices, using advanced statistics for the local area such as East London. For example, the company estimates that entrepreneurs who are looking for yoga nearby could stay in the building for 20 months, while those who have a balcony/outdoor space could stay up to 22 months. Similarly, parents who find a school nearby could average a tenancy length of up to 22 months, while those looking for a pet friendly development could stay for an average of 20 months.
According to the company, these demographics have a 10-25 per cent higher propensity than others to consume services and may spend up to £2,500 per annum on services and experiences in or around the development. It also believes providing the right services to meet specific demographics’ needs could further enhance not just tenancy length, but also tenant satisfaction rates. These ‘Net Promoter Scores’ (NPS) are used in other industries. A 10 per cent higher NPS would increase referral rates by 20 to 30 per cent, thereby further reducing renewal costs and increasing the opportunity to create high lifetime value for developers by cross-selling across student, multi-family and later living concepts to loyal residents.
The curation of TDD is a new venture for Houzen and the first of a number of new deep data tools that the company is releasing from November 2019 onwards.
Tenant demographic data is the new power tool in build to rent operators’ and investors’ armoury. It is already bringing about a step-change in the speed at which buildings fill, saving millions of pounds for investors, helping operators to avoid void periods and enhancing tenant communities. This is the face of the build to rent sector of the future.
Houzen founder, Saurabh Saxena, says:
“TDD is going to play a hugely important role in the rental accommodation sector going forward and we are delighted to be able to use technology in a way that benefits all those with a stake in the sector.
“Being able to contribute to longer tenancies in order to grow communities is a really exciting venture.”
