My First 100 Days in the Rental Living Sector
5 observations and opportunities from other industries
Author: Ronak Rawal, Senior Director, GAA
Ronak Rawal joined strategic consultancy service, Global Apartment Advisors (GAA), as Senior Director in April 2024. He joined GAA from one the world’s’ biggest retailers, Tesco. In addition to his Strategic Leader role at Tesco, Ronak has worked around the world in a number of high-profile consulting roles for large corporates such as PwC and BT for over a decade. Now, 100 days into his role at GAA, Ronak shares his observations and opportunities within the rental living sector.
It’s been just over 100 days since I joined Global Apartment Advisors (GAA) and it’s been a rapid and rewarding learning experience getting to grips with a new industry and network. Since April, I have been fully emersed in the Rental Living Sector having attended MIPIM, UKREiiF, an ARL Study Tour of Manchester, and multiple industry events and site visits across the country. I’ve also had the privilege of meeting, working with, and learning from some of the top Rental Living Sector experts who have made me feel welcomed and excited for the future.
My career to date has been focused around corporate strategic and improvement related ‘consulting’ style roles across both public and private sectors, with professional services, telecoms and retail being the three main industries that stand out. Over the past 20 years, I have been fortunate enough to develop a set of transferable industry agnostic skills which I now intend on applying at GAA to harness the exceptional knowledge across our exceptional team and evolve GAA into the leading Living Sector consultancy that is has the potential to be.
So, having come into the Rental Living Sector with fresh eyes, I thought I’d share five of my initial observations, focusing on some of the key similarities and differences between this and other industries I have worked in. I am sure these will evolve over time, but I hope they resonate with many and make the Rental Living Sector more accessible for those considering a move or career change.
1. It's not as big and scary as it looks from the outside
Real estate is everywhere and impacts everyone in some form, residential sectors even more so as everyone needs a place to live. But despite the prominence, scale and impact of the sector, it’s a relatively small world on the inside. There are not that many businesses and experts in the Living Sector in the UK, and there are only a handful of global markets that could be considered more ‘mature’ than the UK Living Sector, leaving limited comparators or sources of best practice that we can learn from. Having tried to meet as many people as possible over the past few months, it’s comforting to know that I am already recognising familiar faces and continuing conversations with peers that I’ve met a few times now. However, I didn’t feel the same openness to network, collaborate and share ideas in industries like retail, which I put down to the maturity of the industry, fine margins and increasing need to protect IP from the masses of competitors.
2. It’s more than just ‘bricks and mortar’
I thought I was being approached for a job in property when I was first introduced to GAA but quickly found that the physical buildings we see every day are merely the outputs of a whole host of different research, discussions and transactions that are happening on daily basis.
After leaving school, I originally wanted to be an architect (but decided that seven years at Uni wasn’t for me!) and was looking forward to learning about the design and construction process of housebuilding. In reality, the first thing I needed to understand was ‘the why’. Why do we need different types of housing? Why is the Living Sector now so important? Why do investors choose to invest in certain types of developments? There are many different external influences that contribute to the answers to these types of questions, all coming from different sectors – whether it’s appreciating the political landscape and drivers of demand, understanding the macroeconomic impact on cap rates and yields, the importance of ESG in future design, or even using the latest technology to improve the quality of resident experience. All these elements are from outside of the traditional real estate domain, showing there is more opportunity (and need) than ever for different skills and experience to enter this market. You don’t need to be a real estate lifer to make a significant impact.
3. We live in a ‘VUCA’ world
VUCA – Volatility, Uncertainty, Complexity, Ambiguity – four well used words in recent times, in particularly over the past five years or so. In this time we have faced a global pandemic, financial crashes (with the most severe jumps in interest and inflation rates in history), multiple international wars and even a new UK government after 14 years – life is all about change and it’s those who are able to adapt to change that will survive the longest (yes, I did just shamelessly steal a Charles Darwin quote). This opens doors for those who are now developing their careers through periods of change. The skill of innovating and finding new ways to operate has become just as important as the technical skills that are built up over time.
The Rental Living Sector specifically is a great example of this – it was around the time of the 2012 London Olympics when the UK started to coin the term ‘Build To Rent’ (BTR) when Delancey (backed by Qatari Diar) purchased a 50% stake in the ‘Olympic Village’ apartments in Stratford (which later led to the formation of Get Living London). Fast forward to the current Olympic year of 2024 and the UK now has over 100k operational BTR units with record levels of investment in the sector. But still, BTR only accounts for 3% of the total Private Rental Sector (PRS) market in the UK – there is clearly a long way to go to reach the 30%+ we see in the USA and other countries, and plenty of opportunities for those who want to be involved in the rise of the Living Sector.
4. The customer is king
Any asset built, or service delivered, has to cater for the community it is intended to serve. This is common in all industries and probably most prevalent in retail where competition for customers and their business is fierce. I see a lot of similarities in the Living Sector in particular in markets that are leading the way in BTR investment and growth like London and Manchester. However, I do believe we can do more to offer a better range of options to our UK customers to cater for a wider variety of communities. There is a tendency to build the biggest and best scheme that appeals to investors and instagrammers alike, but what about the everyday individuals and families that arguably depend on entry and mid-level products to live an acceptable quality of life? My previous employer is the largest ‘value’ based retailer in the UK (Tesco) and they have retained a 30%+ market share for over 100 years by serving everybody across all personas and affluence levels, it’s a core part of its DNA – maybe there is something to learn from this?
Brand loyalty is another area that retailers excel in. Many consumers continue to shop with the same brand due to the consistency of experience, familiarity of products and feeling that they get value for money. We are starting to see dedicated Rental Living Sector operators provide the same to residents and its fantastic to see brands from other sectors now entering the BTR market to raise the bar in this area. It’s no surprise that we’ve seen the likes of John Lewis, Asda and Ikea amongst others, trying to impress the real estate industry with their well-loved brands and customer focused foundations – this could be a pioneering move that sees others follow suit, providing yet another channel for ‘outsiders’ to integrate into the world of real estate.
5. Finding the balance between innovation and standardisation
Most processes need to operate at high volumes to maximise efficiencies and economies of scale. This is more obvious in manufacturing and supply chain environments but is also evident on the operational side of BTR developments. Operators like Grainger have demonstrated this by growing local clusters of BTR properties in order to share resources and best practices better. From my experience, standards are the bedrock of any high performing business which is why most large corporations have dedicated business and process improvement teams, whose roles are to identify the best way to carry out an activity and ensure this is applied universally. Standardisation reduces variability which in turn enables compliance. Compliance is becoming increasingly relevant in all sectors and is often de-prioritised as an ‘administrative’ activity.
There are some that believe that standardisation suppresses innovation, but I couldn’t disagree more. All organisations need to find a way to embrace innovation and test new ideas in a safe environment – and once a better way has been identified, this should become the new standard for everyone. There are a number of larger BTR operators that are now reaching optimum scale so their challenge will be how they maximise the benefits of this without jeopardising regulatory and compliance requirements. I see the need for more controlled innovation centres, process experts and shared service specialists in this space to facilitate continued growth in the Living sector. This not only applies to the larger players but could enable growing businesses to experiment more and control costs whilst budgets are tight.
In summary, I have been amazed by how fast the Rental Living Sector has developed over the past decade and yet there is still so much more to do. With recent announcements to our planning policies in the UK, there is a renewed appetite for investment and growth across all residential asset classes and the Living Sector has a significant role to play in this. There are plenty of transferable skills that can be applied here and new capabilities will be leveraged from other industries as the sector matures. I am personally looking forward to demonstrating this at GAA and I hope others who have a desire to help build flourishing communities are encouraged to do the same.
If you would like to know more about any of the above or would just like to chat about your career options in the Living Sector, please reach out to Ronak at rrawal@globalaptadvisors.com