A purpose-built residential building for rent is a very different proposition than a for-sale residential building. For the former, there is a greater emphasis on the provision of communal spaces and facilities. Fixtures and fittings need to be more durable to withstand tenant turnover, proactive management is essential to the customer experience and operational efficiencies are key.

These buildings for rent have a number of core characteristics in common, regardless of who they are targeted at: they all feature communal spaces and shared amenities, together with residential units for rent. But there are differences depending on the occupier. Here are the key distinctions:

Built to rent (multifamily)

For this type of building an appropriate mix of apartment sizes and types is essential to support letting rates. Unit size and specification are more important than in the case of student housing. Larger units should be designed with sharers in mind, with bedrooms of equal size and positioned at opposite sides of the unit.

The Collective’s co-living scheme at Old Oak Common in London is one such example. With 550-rooms, it features 125,000 sq ft of co-living space, 14,500 sq ft of amenity space, 28,000 sq ft of office and co-working space. The majority of rooms are ‘twodios’, two furnished bedrooms (around 100 sq ft) next to a shower room with a shared kitchen area. Compact personal space is compensated for by extensive communal space, including a bar, restaurant, cinema room, spa, gym, roof terrace, large kitchens to host dinner parties and a library.

Senior housing

Senior housing tends to offer larger communal areas, as these residents spend more time at the property. Extensive shared amenities and events programmes are on offer to encourage social interaction. Additional services may be offered on an à la carte basis such as 24/7 emergency assistance, meal plans, cleaning and maintenance services and even excursions.

Aesthetically, individual units may look like any other modern apartment, but with small adaptations to minimise risk from falls. A market-leader in this regard is Domitys whose senior services residences comprise furnished apartments and over 800 sq m of shared amenity space, including restaurants, swimming pools and gyms as well as an activity programme offering gardening, concerts and games. The buildings are typically located in urban areas, close to transportation and shops.

The model has proved successful, with residences achieving an average 98 per cent occupancy rate on stabilised assets. Domitys is currently concentrated in France but has expanded into Belgium and Italy.

Student housing

Student housing unit sizes are smaller, usually in the form of cluster flats with ensuite bedrooms and a shared kitchen, or self-contained studios. Flexible study space is  important, together with communal lounges, games rooms or gyms, depending on the price point.

A leading example is Vita Group whose Vita Student assets are based in prime central locations in Russell Group University cities (pictured above). They feature generous communal spaces and amenity offers including 24/7 concierge and security, inclusive grab & go breakfast, games rooms, gyms, cinemas, private dining rooms and quiet study areas.

For each form of purpose-built accommodation, tailoring the assets’ features to meet the residents’ requirements and proactive management will be essential to achieve operational efficiencies. Investors’ search for secure income streams will continue to underpin interest across ‘alternative’ residential assets. Pioneer investor-developers will be integral to delivering new supply, securing tomorrow’s investment stock.

Artist’s impression of the potential different areas that could be included in a purpose-built residential building for rent 

Upper floors

The highest rents are usually achieved on the upper floors, especially those units that offer good views. Communal space on these levels can add value for residents. This may take the form of shared living rooms, more private than spaces on the ground floor. Such spaces are especially important in co-living or student buildings where private spaces are smaller.

Ground

This is the building's shop front. The space matters and is particularly important for attracting residents who are heavily influenced by the ameneties on offer when making a decision to rent (even if they don't end up using them). Lounge areas, workspaces, gyms (of sufficient size) and leisure spaces are all common features. Flexible spaces that can be used for organised events or activities are important too. A café or a bar may also be open to non-residents, improving visibility and deversifying income streams.

Basement

Car and bicycle parking features here, although fewer spaces are required in comparison with a build-to-sell scheme, together with resident storage and associated building plant and servicing streams. 

Further information

Read more Global Living: Outlook

Understanding the Renters (Reform) Bill