CHRISTIAN GRAHAME HEAD OF HOME

Managing leading Australian Build to Rent brand, HOME business that started as an offshoot of Grocon’s expansion into an indepdendent BTR platform, Christian Grahame has seen BTR developments evolve from repurposed convetional offthe-plan residential apartments to bespoke luxury offerings.

Highly optimistic about the sector’s future in Australia, he reflects on how the ideal balance between good design, location and service of an asset can change the stigmas associated with renting. He believes Home’s role in Australia's BTR space is to reinvent renting.

ARM: How did Smith Collective start its life as a BTR?

Christian Grahame (CG): Smith Collective, formerly Parklands, was the former Commonwealth Games Village in the Gold Coast. The apartments and amenities on-site were originally developed for that context. That was when Grocon first entered into the BTR market, and subsequently, we explored it very seriously by establishing an new and indepdent business in Home, which was solely focussed on rental communities.

Grocon won the bid for the Commonwealth Games village in 2005, and ARM was part of that consortium. The model was originally inspired by what had been created for the London Olympic Games, East Village in 2012, and reflected the idea of a purposebuilt major residential village. The reason why BTR worked on this site was because it allowed us to create a built-form community and town centre instantaneously. This would be very hard to achieve in a more conventional residential format, because the risk of having to get the pre-sales would be probably too great and require staging. The BTR model enables investors to create these assets, knowing that they will then lease them to residents and then hold them long-term. With this in mind, you probably wouldn't have been able to do a Commonwealth Games village with that level of quality and built form in any other format than BTR. You would’ve had to do townhouses and demountables that were only temporary dwellings.

ARM: How was the construction and delivery of Smith Collective unique as a BTR asset?

CG: The 1250 apartments, the town centre and the extensive parklands were all delivered in a single stage. That's why it worked as a Commonwealth Games village because it was an instant town centre and an instant community. It was the first BTR offering that had been done in Australia and it still remains the largest single asset. It was an exemplar project and it required multiple layers of government and private sector working together to produce it.

ARM: How did the design outcomes for Smith Collective reflect Home’s vision for the overall look and feel of the site?

CG: ARM supported us in putting together a cohesive vision for the project that considered how a large collection of buildings would sit together as a family, while still feeling dynamic. I think this is one thing the design outcomes achieved really well, it’s clearly a collection of buildings, but they morph and change personality as you move through the site’s many public spaces and places. ARM’s architectural vision was able to deliver on that vision.

ARM: It’s now been a few years since Parklands/Smith Collective was built, how does it fit into Australia’s current BTR market?

CG: There are currently about 10,000 apartments across Australia in various stages of development, but there are only a few live operating assets – and they are essentially pilot projects. One of them is obviously Smith Collective. I don’t think all the operating BTR assets are necessarily representative of what BTR developments are aspiring to be in Australia. Next year however, we’ll start to see assets with specifically sourced sites, and buildings specifically designed for BTR end-use in Melbourne including our HOME Southbank and HOME Richmond assets.

Projects like Parklands, now Smith Collective, were really important pilot foundation projects, laying the groundwork for the next generation of BTR assets that will open next year. By 2024 we’ll see multiple BTR developments across multiple states. Ultimately, Australia’s BTR market is forecasted to become a $100 billion total value sector over the next decade.

ARM: What were some key lessons you took from working on Parklands/ Smith Collective as a pilot project that you will apply to subsequent BTR projects?

CG: Firstly, the buildings need to be designed so they are not only appealing to the customers when they're first introduced to them, but they also need to be durable in the long run given the owner is going to hold these assets for long periods of time. The long-term maintenance and performance of these buildings is critically important.

I also think BTR buildings have the opportunity to be more sustainable than conventional residential developments, because more sustainable buildings will cost the owner less to run. You end up with an alignment between the owner and the occupants when the building incorporates sustainable measures and quality materials that promote its longevity over time.

Parklands also taught us just how much residents value the idea of community in a BTR, and that’s definitely not just marketing speak. That means considering more opportunities to incorporate places for people to meet and connect. This is perhaps even more important than we realised back when we were working on Parklands.

ARM: How does the emergence of the BTR sector in Australia reflect people’s changing views about renting?

CG: Traditionally in Australia, we've thought about renting as being something that people do because they had to. I think it's becoming clear in the next generation that the way people live is changing. A lot of people will rent by choice for a variety of reasons; maybe they don’t want a mortgage, or they want to maintain flexibility, or owning property simply isn’t a priority for them, or they're rentvesting. I think this idea of renting by choice and renting where you want to live is fuelling a big part of the BTR movement, as well as the fact that just housing affordability has progressively become worse across Australia.

I think we tend to view renting it in a much more positive light now. We are aiming to attract a tenant who wants to come and live in one of our buildings because they really want to live in that location. They want to live there because they love the building and the service offering. They want to live there because they are surrounded by like-minded people. HOME really celebrates the idea that renting is a positive lifestyle choice, and a chance to live as part of a more connected community and high servcie lifestyle.

ARM: Can you share some insights into how BTR design across different sites speaks to the area’s expected tenant demographics?

CG: Smith Collective is located near a hospital and a university, so a big part of the tenant catchment was always envisaged around those two hubs generating occupants.

We’re locating our other BTR assets in the HOME business where we think young white-collar professionals are going to want to live. That’s areas like Southbank Richmond, Docklands in Melbourne, and St. Peters, Parramatta and St. Leonards in Sydney. We’re aiming for tenants in the 25 to 40 year age bracket, and we do also think there’s probably a market for downsizers either side of that.

While our Richmond and Docklands BTRs are aimed at a younger cohort, they are aimed at a premium audience of people who are prepared to pay to live there. Tenants have access to pet services, health and well-being services, beauty services, and a range of other conveniences in the building, while also being located in some of Melbourne and Sydney’s most soughtafter residential addresses.

ARM: As a developer, what specific design features are you looking for in a BTR asset as opposed to a BTS?

CG: We look for design solutions that promote the building durability and its long-term performance given the owner is going to hold the asset for a long time. We often think of BTRs more like a hotel building rather than just a residential building, because you have a lot of front and back house operations you need to consider.

It’s also essential to consider how the design supports this sense of community across the asset, because that’s a big part of what we're selling. These amenity spaces are critical to the offering. We provide an extensive amount of resident amenity in all our buildings. This includes really substantial wellbeing, coworking and entertainment spaces, as well as a premium front of house offering.

ARM: Does the level of amenity differ in a BTR based on its demographic or location?

CG: The amenities brief doesn't differ, but the scope and execution of the brief does. You can safely say most BTRs will have gyms and pools, lounges and entertainment spaces. However, the execution of these amenities will differ based on location. For example, Docklands has 650 apartments and St Peters is a much smaller and more eclectic offering, so you have to be more clever in the execution of your brief on a smaller site. The offer is standard, if you lived in Docklands and then you move to St. Peters for work you can still expect the same quality of amenity offering but the scale will obviously be different.

ARM: Is this where the idea of brand allegiance comes into BTR?

CG: Absolutely. If a tenant has just been posted to a job in Sydney and they had to move within two weeks, we would be able to support them through that process seamlessly by cancelling their current lease and moving them to one of our Sydney BTR assets. It’s about creating that frictionless model for the tenant that accommodates constantly changing lifestyles. Singles to partners, growing families, or just the desire to upsize or downsize, we can move someone into a more suitable residential offering for their lifestyle within a week. This is where it becomes useful to view the BTR as a long-term asset with the functionality of a hotel.

ARM: How important do you think it is to strip back the industry jargon around BTRs, especially for customers in Australia who might not know much about the sector?

CG: We try not to say BTR when we talk about HOME. We are providers of rental communities exclusively for rent. We are aiming to change perceptions of renting. We like to think of our offering as ‘renting reinvented’.