SERVICE

Build To Rent

Key contact

Morton Fraser_ David Stewart
David Stewart
Partner
David is a partner in the Firm's Real Estate & Infrastructure division with more than 20 years' experience having worked in some of Scotland...
0131 247 1176

The Private Rented Sector (PRS) has been a significant feature of the residential property market in England for many years, particularly in densely populated cities like London and Manchester, and more recently regions like Sheffield, Nottingham and many others. That umbrella asset class has, in recent years, been refined into a number of specialist sub-sectors.

 

Benefits we bring to your business 

Build to Rent (BTR) schemes are specifically designed for tenants, with extended communal facilities that are created to command a rental premium or allow the scheme to stand out from a crowded private rental market. Within the BTR sector:

  • Multi-family developments allow for a mix of studio, one, two, three and even four bed apartments, allowing developers and operators to capture a wide section of the rental market, and tailor the services within the scheme to the operator's target market, making the Multi-family sub-sector the most popular in the market
  • Co-living developments are (at present) less common than Multi-family, and place a greater emphasis on communal gathering space in a desire to create a greater sense of community for renters within the development. Communal kitchens and living areas are the norm, with Co-living developments often seeming like an extension for young professionals of the communal living arrangements often found in purpose built student accommodation
  • Single Family/Suburban developments, which focus on traditional houses with little or no shared space, are the least common here in Scotland - the only meaningful distinction between Single Family and traditional housing developments is the retention of the estate with single ownership as an income producing investment. Single Family schemes remain in their infancy in Scotland, but the occupier profile is more stable in this sub-sector and investor interest is growing quickly

Each sub-class targets different renters and therefore has different site requirements, but all of them remain comparatively new alternative investment classes in Scotland. Momentum is certainly growing, however, and the BTR sector in general is one of the most talked about property investment classes right now.  Investment yields may be lower than other sectors, but the reversionary value underpinning the investment, coupled with the large pool of potential tenants offering comfort of income stability means that many institutional funds are now looking at the asset class very carefully. Our experienced 8 partner team at Morton Fraser, headed by partner David Stewart, understands the nuances of the BTR market. We have advised on schemes involving private, mid-market and affordable rents, and we have teams of experts in the areas of real estate, housebuilding, construction, planning, banking and environmental law meaning we can handle any BTR project in Scotland regardless of the complexity or scale.

Recent projects which we have been involved with include acting for specialist developers and operators in some of the largest purpose built BTR schemes underway in Edinburgh and Glasgow, and also acting for architects involved in BTR projects across the UK.