This episode was recorded on the land of the Wurundjeri people of the Kulin Nation. We pay our respects to their elders, past, present and future.
Hello and welcome to another episode of Precisely Property. I’m your host, Richard Temlett. I’m excited to have you with us today. If you’re here for the first time, thank you for joining us. I encourage you to listen to our previous episodes where we discuss all things property with a focus on dynamic discussions with industry leaders. In this episode, we’ll be talking with Ronak Rawal of Global Apartment Advisors. So sit back, relax, and let’s get started.
Ronak has over 15 years of experience across strategy transformation and began consulting for leading blue-chip organizations. He began his career at PWC where he spent five years building his consulting expertise before moving into senior strategy and transformation roles with BT and Tesco. Ronak specialises in strategic development, business transformation and performance improvement. With global experience across multiple geographies and cultures, he brings deep expertise in managing complex programmes and driving measurable results. In his role at GAA, Ronak is responsible for the international expansion of the business with a focus on strategic planning, client relationship management, business operations, and talent developments, playing a pivotal role in supporting the firm’s long-term growth ambitions.
Welcome Ronak.
Ronak: Hi Richard.
Richard: Thank you again for coming on the show. I know we’ve had a couple of your colleagues on the show to talk about all things in the living sectors whether its BTR co-living and then some of the real key elements of those absolutely fascinating asset classes. And I think today we’re going to have another really great session. I always love chatting with yourself and your colleagues, given that you’re operating across a diverse range of markets and no doubt we’ll talk about what’s happening in some of them today. And certainly, they are often much more mature markets than the Australian market. And so I often feel when I talk with yourself that I’m almost looking into the future, but in terms of where the market might be going. Just to bring our listeners up to speed about maybe a month or two ago, maybe a little bit more. You reached out and you just said that you guys had actually prepared the reports that we’re going to talk about today, which is basically a global prop tech research reports. And I must admit, there’s a couple of my favorite words in that heading in itself. I love my property technology, my data, I love the global markets and what’s happening. So I can’t wait to actually talk about some of the findings of the reports. And obviously we’ll be able to, talk about if listeners are very keen to get access to it, how that is possible. Before we get into the contents of the report though, I did have an icebreaker question. Offline I said I couldn’t wait to hear your answer and I certainly now that we’re online, I can’t wait to hear your answer. What’s something uniquely Australian you experienced on your trip to Australia that you don’t think would quite translate back into the United Kingdom?
Ronak: I thought I’d have to think long and hard about this question actually, but there were a few things that jumped to mind that felt culturally odd, shall we say, when I came back to the UK. So the first one that came to mind was that apparently, it’s just normal to surf before work and hit the beach and get on the surfboard. And that is a completely unknown capacity here in the UK because we just don’t have the ability to do that. And the weather is terrible. So, it doesn’t work out in that way. So, waking up, hitting the beach, going for a surf and then go into the office. You know, it feels like quite a unique thing to do. The other one I noticed is that everyone seems to walk around in bare feet and it’s just normal to walk around in barefoot. Again, you know, having lived in Manchester and London over the last kind of 30, 40 years, you would be a very brave person if you decided to walk around the streets in bare feet. So I wouldn’t recommend that at all. And then I guess if you’re not walking around in bare feet, you’re probably wearing what you would call thongs, but that has a very different meaning here in the UK. So, I wouldn’t be using that terminology here in the UK either. We’d probably go to flip-flops or sandals or something like that instead.
So yeah, the bare foot and thong thing was, it took a bit of adjusting when I was out there. And then I guess the final thing was, is everyone’s your mate. Then everyone seems to call you mate. Everyone seems to say, g’day mate and hi mate. It’s nice to be accepted in a new culture in it in a very quick way. You certainly don’t get that type of love in places like London where everyone’s got their head down and just getting on with their day. It was great. I really enjoyed it, but it was a bit of a culture shock getting back to London after that.
Richard: Well, Ronak, I must admit you said you had some fantastic answers and you’ve certainly outdone yourself. In response to some of them, and I don’t want to dominate the podcast obviously with talking about these things, but surfing before work, I’m assuming that you’re either in Sydney or perhaps the Gold Coast or Brisbane where that occurred. I don’t know where you would have been with people not wearing shoes. That does concern me, but perhaps we’ll find that out another day. Yes, everyone is certainly your mates. That is a brilliant one. And then your comments about thongs. Well, I grew up in South Africa and my definition of thongs and flip flops or sandals is probably very similar to yours. I certainly could sympathize with you there. That’s exactly right. But look, that was a brilliant answer. And I suspect there’s a few of our mutual friends and clients that I’ve certainly introduced you to that probably are laughing their heads off at that because I suspect you’re going to raise the Australia English cultural divide. I think you’ve done that very well. So congratulations. I’m keen to though, in a more serious vein, talk about your PropTech research reports. I’d love to actually know, we’re going to basically talk about what the gap in the market was, why it was prepared. I’m keen to talk about some of the findings and I’m also keen to then jump into and remind our listeners that you guys do work in the living sectors across multiple cities, multiple countries, and no doubt there’s an opportunity that we’ll be able to tie some of those learnings into today’s session because as we talking about offline, said there’s an enormous amount of interest in co-living and coming out of Sydney and then also Build to Rent more broadly across Australia. We can also delve into that and perhaps some of the uses from this report. So let’s start with the first part of the session really, I suppose it’s the need, the need for the report. What is the gap in the market that you identified and what is the report all about?
Ronak: Yeah, sure. Thanks, Richard. Yeah, mean, just a bit of context as to where this report came from. This report was actually originally part of a commission from a large developer based in the UAE, who was consolidating a number of their property management platforms. They currently manage over 170,000 rental units across the region, so it’s no significant or insignificant size of portfolio. And whilst in the UK and the markets like Australia, that feels like a huge portfolio to manage in markets like the States, that’s pretty common actually to work at that scale. So, the request was really that they look into consolidate. They would like a report looking at what options are out in the market. What are the benchmarks could they look at in different markets around the world? What type of technology is emerging in the sector today that they could embrace? And how do they even go about making the decision on what type of PropTech stack to build? What should their strategy be? And which of the components would deliver the most value for them? Now, as we were writing this report, we quickly recognized that this is not unique to any single market. And there are a number of operators, owners, investors that are going through a very similar thinking process in terms of how do they evolve the efficiency of their operations. How do they extract data in a more efficient and effective and accurate way? And how do they really give both stakeholders and the residents the optimum experience that they deserve from the portfolios that are growing in their space? So the report covered a full global review of what PropTech is available. And it was specific to the residential sector. And actually we narrowed down quite heavily on the Build to Renet and rental living sector as well within that. It covered a broad overview of the global landscape. and what’s happening in different markets, who the key players are. It then led into a bit about how to determine your strategy. If you’re approaching a PropTech review or you’re looking at revising the way that your PropTech is delivered across your portfolio. And we explored options around whether you should A build your own technology in-house, which some operators and investors are doing. Do you partner with a reputable third party that is well known within the industry and already has a number of capabilities set up and established? Or do you take a slightly different approach and deliver more of a hybrid setup, which could be a combination of the both and maybe picking and choosing the applications or the suppliers or the technologies that you think would better suit your portfolio. And I think the key driver behind this is that there isn’t really one silver bullet that suits every person. Every portfolio, every investor, every operator is coming from a different starting place. Whether that be it from size, whether that being from existing technology. Whether that being it from the capabilities that the in-house teams are able to deliver. And within that, there’s a lot of global regulatory pressures that each market has to face. So we really tried to open up the options to clients like ours in the Middle East, but we really do think this is probably applicable to more people within the wider global rental living market as well.
Richard: Great. All right. I just want to take a bit of a step back to, I suppose, frame the context to this conversation as we discuss quite frequently, Australia is really an emerging market, I was talking to you as we were preparing for this session where we’ve had a few projects now that have been completed. They’ve reached stabilization, we’re just started to see them, a couple of them starting to transact. Obviously, what you’re talking about is where Australia is likely to get to in maybe a one to two market cycles time in terms of having the scale, the data or the requirement for the data. Can you, suppose, when you looked at all the global markets, knowing what you know about Australia in terms of an emerging market and then comparing to more mature markets, can you just explain a little bit more why? Why does this need to be done? Why is there consolidating? Is, it investor driven? Is it data to inform returns? Let’s just tease it out a little bit more because I would hazard a guess that there’s a number of developers or operators that are not yet at this point, they might see it on the horizon going, this is something we’re going have to do in five years’ time. Maybe some of them are ahead of time and they’re looking at it already now, but some of them may not have even considered it. So, I’m interested to know why, why is this essential? Why is this so important?
Ronak: Yeah, no worries. I think there are a number of common themes when it comes to the why and some of the challenges and ambitions that a lot of investors and operators are going through at the moment. Some of them are around the accuracy of data and the ability to be able to translate a single source of truth across a portfolio. And I guess that works at a number of different levels, whether it be at asset management level, property management level, or even resident engagement level, if they’re being fed data through the systems as well. So we’re finding that there are a number of generic systems in the market that might be kind of specialised for certain sectors, but every single client has a slightly unique starting point and an existing infrastructure. So extracting a single source of data has always been a challenge. And I think that having good data in gives you kind of good solutions and good recommendations that come out of the back end. The other thing we’ve identified is that a lot of our clients are looking for is more control and ownership over the data that they host. And sometimes relinquishing that to a third party or not building sufficient capabilities within their organisation limits your ability to analyse the data that you’re collecting across front and middle and back offices and then translate that into insightful solutions for improvements for both your stakeholders and residents for the future. We hear a lot on the movement about automation and about efficiencies and that has been a key driver behind a lot of the evolution in this space. It’s no surprise that most operators are facing increasing challenges through inflation, interest rate charges, rent controls. There are a number of financial pressures that means that the technology that they’re using needs to continue to deliver operational efficiencies for them. So, they can reduce their OPEX, they can increase their NOI, and they can re-divert some of their resources into more customer facing and value out activities. So, automation, operational efficiency and cost reduction has been a key one. And then I think the final theme was that technology is evolving at rapid rate of knots at the moment. And a lot of the tech and platforms that we’ve worked with over the last couple of years are quickly becoming outdated. There are new solutions that are hitting the market that are providing enhanced ways of working, delivering a step change in efficiencies that operators and investors can see, and also delivering an enhanced way of living for residents so they get a much better experience than they’ve ever had before.
So, if you’ve not caught up into the modern day tech stack and you’re still operating on old systems, you’ll quickly be found out and both your stakeholders and residents will be looking for solutions that give them a more optimised experience. So I guess to summarise, the key themes we’re finding are generic systems, restricting the ability to control and own data, providing a single source of truth and having accuracy in the data that you have across a wider portfolio, automation and improvement in operational efficiencies and just upgrading legacy systems to make sure that they are fit for purpose for the modern day renter and stakeholder.
Richard: Gotcha. Okay. Again, I want to just connect because it’s very clear to me that some of these markets are 10, 15 years ahead of where Australia is. So I’m going to ask a couple of simple for you, there’ll be simple questions, but It’ll be really important to close the loop. The first one is what is the actual type of data in your experience that the type or an example of data that should be being collected? I could hazard an educated guess. I’ve spoken to some of the clients about it, but really a lot of them are still actually going, well, what data is it? Is for the operation of the building? Is it for the residents’ experiences? So let’s talk about that and then we’ll jump into the technology and what type of tech stacks are available or could be used. So let’s start with the data. What data needs to be collected and then who actually wants the data?
Ronak: Yeah, that’s a great point. So I’m probably flicker on its head and talk about kind of the organisational misalignment with it when it comes to data. And the way we like to think about it is there are three stakeholders that might use the same data set in a slightly different way. One of them is the asset or investment managers that are responsible for various assets. And they’re probably more interested in how capital is flowing, the returns they’re getting, the financial data, the strategic direction that the data is helping them to facilitate with their wider portfolio or a particular asset that they’re looking at. So they really want to know about how the asset is performing financially, how it’s performing from an occupancy perspective, are their operators keeping to budget, are residents delivering the rent, what are the void rates, what is the bad debt that’s happening within their portfolio and are they meeting their targets from their delivery and from the returns that they’re seeing. You then have another stakeholder that’s using a similar set of data which is the operator and they might need that for more operational purposes. So, we’re looking at leasing effectiveness, the delivery of services, how residents are receiving data and the experience they’re getting from the data that they’ve been able to turn around. And a lot of operational KPIs and metrics that are really important to ensure that you’re monitoring and improving the way that you’re running and operating a particular building. And then you’ve got the technology system itself. So the workflows, the automation, the reporting that goes to various stakeholders, how that data is flowing between those systems. And actually, if you think about the type of data that might be of interest to all three of these stakeholders within a typical organisation, the way we like to think about is across the front office, the middle office, and the back office. And there has to be a connection between all of that data so that everybody is singing off the same hymn sheet. So, some of the areas that you might see data flowing between there is within your marketing and leasing, for example. What type of vacancy listings do you have at the moment? How are you transacting and converting leads that are coming through the door to convert them into leases and then renewals? What is the tenant screening process looking like and how are we making that more efficient so that we’re converting at a more efficient rate? What does that then mean in terms of budgeting for leasing, staff and payroll allocation into the team? How does the back office then interface with the operations and the data then receiving from the front office? It might also move into areas such as kind of move in and move out from a front office perspective. So how a lease is being signed, how is your inspection checklist data being collected, security information, tenant information, deposit information. All this data is collected at the front end when you’re speaking to a tenant and you’re working with an operator, but will also be of interest to the back, and teams and the investors who are interested in the outcome of those processes as well.
And in the middle of these elements, there is a layer of synchronization to make sure that real-time data is synchronised at the right pace and at the right time. It’s validated. Any conflicts or disputes in data are resolved quickly. And essentially, everybody has a single source of truth. I think that’s the key thing. Reporting is another key area. Reporting and analytics. So being able to identify data from cross-system reports. So how old is your PMS system interface with your finance database? Are the KPIs that you’re collecting at the front office when it comes to tenancy management, operations, property management being reflected into the back-office teams and are the finance HR and property teams being able to see the same data that you’re collecting upfront? Document management has also become a big thing recently and we’ve seen there are a number of organisations having to host hundreds of thousands of different documents across their tenancies and across their properties to make sure that they’re compliant. And sometimes that’s very disorganized. So, when you’re moving through a handover or you’ll even go through an exit strategy to try and sell on to another investor, it becomes a real sticking point. And sometimes they delay the delay or even did a deterrent to the process. So, it’s really important that the data that is being collected across the entire front, middle and back office is consistent and is translatable to all stakeholders that need to access it and report on it as well.
Richard: That’s absolutely incredible. And I’ve made a couple of notes and no doubt I’ll be able to tease him out as we keep talking. But I want to keep the momentum going. Can you talk to me a little bit more about the technology? I’m assuming the technology for different countries, different platforms, I shouldn’t make the assumptions, but I would have just assumed that it would be quite different. What is some of the best, we don’t have to name the worst, I suppose, but like the best or most evolving technology that you’ve come across?
Ronak: Yeah. I mean, it’s probably worth just, contacting this by saying that the word prop tech or property technology is, a relatively broad spectrum. Whilst a lot of people seem to think it’s about the operational tech stack that property managers or operators might use, there is a broader scope of where, the technology can deliver a significant value in. That starts way up into kind of the investment chain, if you like, and how investors are using tech to improve the efficiency of acquisitions or their ownership of a particular asset. There was also then the kind of development tech and construction tech, which is all about how you build efficiently and monitor construction in the right way. And once that asset is then built, you then think about your property management tech and operational tech. And if I focus a little bit more on that space, I think it’s probably easier to think about property technology or property management systems in three journeys, if you like. And that might be the pre-tenancy journey. So how do you capture leads and market the brand of a particular asset to ensure that you’re attracting the right demographics and the right people into your building? So you will have technology that looks at things like the pricing of your assets, the marketing of it, lead generation. And actually, we’ve seen a lot of growth in the lead to lease space at the moment when it comes to technology. And I think, you know, I’m to be a little bit reluctant to use the phrase AI, if you like, regularly, but there are a lot of solutions at the moment that are leveraging these new large platforms and being able to turn around significant efficiencies in this space. I mean, we actually, as a business, we partner with a few lead to lease technology companies that are essentially providing operators with 24×7 access to clients and to potential leads. They’re providing text, WhatsApp, voice chats, all driven through automated AI technology. And honestly, as a user and aa tester of some of this technology, it’s phenomenal how advanced this has become over the last couple of years. And we personally do a lot of mystery shopping in this space and we’re evolving the way that we are. thinking about the lead to least mystery shopping process, for example, because we no longer need to evaluate the effectiveness of the human processes and the manual processes of making a call or submitting an online form anymore. We’re now evaluating the effectiveness of the AI platforms and the information it’s giving us.
I’ll give you one example just to bring this to life. We were testing one of the AI voice calls through a partner that we work with. I didn’t know whether it was a real person or an AI conversation we were having until I was told it was an AI agent that I was speaking to at the back end. But I then went on to ask about how they control the conversation and how they actually direct it to make sure that the AI is giving the right answers and the right direction of conversation. And their answer was simply, we don’t control it. We set guardrails and it lets it talk to you as it likes. And it went on to ask me about, I was inquiring about moving into a property and about a two bedroom apartment, et cetera. And then it went on to ask me whether I have any pets, I have two cats, but I lied and said I had two big dogs just to test whether it would respond in the right way. And it would actually let me proceed with the process. And then when asked on to ask me what type of dogs they were, what my dog’s names were. And I find myself kind of making a story up that I never even anticipated I would do. But completely caught me off guard and the natural tone of these agents was phenomenal. So that’s an example of kind of lead to lease testing tech in the pre-tenancy space that I think will be growing a lot in global markets. And I anticipate we’ll see that all over the world and it really will deliver efficiencies and improvement in conversion of lead to lease processes.
You then have tech in the viewing space. So, no longer do people have to do a physical viewing anymore to go and see their property. We see this a lot in the kind of co-living and PBSA market actually, where virtual tours are being provided. And I’m not just talking about Matterport and the ability to kind of move around the building using kind of fixed camera technology. But nowadays you can literally walk through the building and into apartments using this new virtual viewing technology, which gives you freedom of where you’d like to go. You can type in any particular amenity you want to see. You can look into a one and two bed. And it really does give you an immersive experience and removes the need to actually be there physically in person. So I thought that was a nice addition to the whole kind of leasing journey. We’re looking at things like security deposits, referencing, contract management, lease generation. All of this used to be manual processes that either a team or a relatively semi-manual process would deliver. That is no longer the case. This can all be automated and delivered outside of your current team capacity, especially if you’re finding that you’re streamlining and standardising the activity that’s happening in this space. We then think about the mid tenancy level. So, what happens after a tenant is moving into your building? And I’ve made a list here of some of the tech solutions that we’re starting to see in this space, but we’re even starting to see, you know, non-human based checking procedures. So fully digital check-in for new tenants. So you no longer need to go and see for a desk. You can check in almost hotel style on a screen. Obviously all of the pre-screening has been done. And along with that, you would download an app on your phone that gives you guides for the building, gives you access to the right doors and floors that you need. It gives you the ability to chat to an agent if you need any support as you’re arriving into the building. Now, a lot of people have said, oh, this might impact the tenant experience. And a lot of people would like to speak to somebody face to face when they’re moving into a building, which in most cases you might think that’s true. But actually, we’re finding an increasing amount of people that you know, have been through a number of conversations with the operator or with the leasing team. They understand what they need to do and they just want to get in their apartment. They don’t want to wait in a queue at front desk and speak to somebody. You might be tired after a long day of work and you’re moving your stuff into a new apartment. You just want to check in and go. And so that technology, think again, is something that more people embrace and would also deliver additional efficiencies for your front of house and leasing teams as well in the future.
Billing and payment, all automated nowadays, community engagement, we’re seeing push notifications being sent through resident apps. The organisation of events, community events and sporting events, social events. There’s charity events being organised through these apps nowadays and really does bring that community together in a much more efficient way. And if you’re living in a building with hundreds, maybe thousands of residents in a similar space, it’s extremely difficult for your front of house and your front of house team and your leasing team or your customer service team to know absolutely everybody in the building. But what you can do, is send information to these people and to groups of people in a more efficient way and encourage communities to come together on a digital platform as opposed to physically or all face to face. Then we see more operational areas. Things like parcel management, mailbox management is becoming quite a key one. Parcel management has been really tricky in the past and we’ve seen examples of really poor management techniques and practices on how parcels are coming into buildings. Again, if you’ve got an asset with two, three hundred units in it, we’re expecting thousands of parcels a day to be delivered to that particular property. If you’re, if you’re depending on your front desk staff to go and retrieve parcels for everybody that’s coming into the building, that’s almost a full time job. So how do you make it as easy and efficient for residents to go and self-serve, but it’s also secure. You know, there’s no threat of theft or security issues within, within that system. And there are a number of different solutions in that space. And we’re not just talking about no big parcel rooms. We’re talking about automated lockers. We’re talking about inbuilt locker systems; it’s the front of people’s doors. You know there’s loads of great technology that we started to see emerging from this space. And then obviously the end of tenancy when people are moving out, there is a renewal process. So you can automate renewals, even the negotiation around it. Leases can be generated automatically if a renewal has been accepted. The deposit management in terms of how inventory has been inspected and final inspections have been completed and the processing of the return of that deposit. And I guess more importantly, the feedback and the continued marketing to those residents. there is always a pullback into the system if a resident has moved out and is looking for alternative options.
Now, all of this, you know, these are just a few examples of the long list I’ve put together. All of this used to be delivered by a really comprehensive staffing team, onsite team that would be able to be the central source of knowledge. And everyone would come to this front desk or the operational team if they needed advice. That is no longer the case in the modern day property rental tech stack. This is all going to be digitalised and automated. We expect that to continue to deliver further efficiencies and experience improvements for residents.
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Richard: What has that done to costs? Has that reduced costs and has that then flowed through to improved net operating incomes and the overall performance of the asset? Because what I’m still finding when I speak with a lot of the developers in Australia is they still go, well, what are the staffing ratios that are required and trying to break that down? I’m just, what I’m hearing from you is so much of this can just be automated. I’m assuming then costs can come down. So, what have you then seen? Is it actually flowed through to valuations and transactions and things like that?
Ronak: Yeah, a hundred percent. I mean, again, if you just go back to the fundamentals of what technology is here to do, technology is really the automation and the digitalisation of manual processes and workflows to improve the efficiency and the speed of delivery of those activities. So it’s a really good question actually, because there isn’t really a simple answer to this. And depending on the strategy that you take to build your PropTech, you might have a slightly different objective and outcome when it comes to efficiencies on cost and reduction in cost. I’m going to refer to a survey that was done by one of the bigger providers, PMS providers in the Wilkern portfolio. They asked all of their clients, why are they moving towards increasing capabilities within their tech stack and extending their tech stack across more of their activity? The main answer, so 55% of respondents said that they struggle to maintain high occupancy rates and they really want to keep that as high as possible towards their target thresholds. But quickly behind that, 54% of respondents said, well, the other aspect is the rising operational costs that we’re facing. And that might be due to labour inflation, wage inflation. It might be due to limitations in growth in terms of rent and income that was expected. It might well be to just general rising in costs and inflation that various markets are facing. There are different regulatory challenges that different markets are facing that as well will determine whether additional cost is required to support them in different markets. But when it comes to cost alone, that would be a key driver behind ensuring that you’re minimising the cost of delivering those services and improving the efficiency and accuracy. Now for an operator, typically the biggest OPEX line you will have within your budget is payroll. Staff are the most expensive component for a fully functioning and stabilised asset. And now whilst we don’t want to go down the route of totally kind of eliminating the staff within a building, still, you there is still a heavy dependence on a good quality team to run and maintain a building effectively. What we would like to do is start evolving the job specs and the roles that those members of staff have to do. And we want staff to be more customer focused, more proactive, focusing on growth, focusing on experience, as opposed to spending all of their time on administrative or transactional tasks. So if you can reduce the amount of spend in your payroll in some of the more transactional and operational areas, potentially middle office, back office areas that are not customer facing, that gives you the ability to invest more in your staffing to improve service, provide that hospitality level of service that clients are now expecting in the BTR space, which is a key differentiator between the best you know, and the mid-tier and the entry level and the underperforming assets that we’ve seen globally around the world.
Now, a lot of the tech we see at the moment, one of their key selling points is about the impact on cost. When I’m just thinking about, you know, from an OPEX perspective, we’re working with another supplier in the space that look at appliance management and their opening pitch to operators and investors is, we can save you 33% on your OPEX for all appliance management. Do you want this or not? And immediately everyone’s like, well, of course with you, it’s a no-brainer. And this is not a revolutionary technology. It’s outsourcing the management and leasing and warranty management for appliances of big BTR buildings and other residential blocks, et cetera. Something that probably should have happened a while ago. But now that this technology has been harnessed, it’s been improved and it’s been standardised so it’s applicable to more and more clients. It’s just become an easy sell within that space. Same on the leasing side. Same on the PMS side. The key drivers behind implementing these technology solutions is efficiency, which then translates to reduction in cost. So, I would say it’s having a big impact. Now, the reason why I said it’s a little bit tricky question to answer is the strategy you take to deliver your portfolio might mean that you’ve heavily invested in your tech stack upfront. And then depending on the route you’ve taken, it might mean that there’s a longer payback period. So, whilst you might get improvements in efficiency, in compliance, in data accuracy. Now, if you’ve decided, for example, to go down the route of building your own PMS platforms and customising something to suit your own portfolio, you have to accept that there’ll be a lot of investment upfront in the technology itself, in the software development, in the teams and the capabilities to actually build that. And I think a lot of people underestimate what it takes to run and maintain a system and continually evolve it, to make sure it’s up to date and suiting the needs of the modern-day portfolio. So, the cost profile and return of investment on a tech platform is different depending on the route and strategy you take. And I can elaborate a little bit more on the different options there. But ultimately, I would imagine that everybody is investing in technology to improve the experience for stakeholders and residents and reduce the cost of running their portfolio.
Richard: Very, very interesting again. Look, I want to shift gears and jump more broadly into what’s happening with BTR and co-living in the UK. But before I do that, is there anything else from your reports that you wanted to just highlight? You know, one or two key findings that jumped out at you that you think might be of interest, especially to the Australian market, which is obviously still emerging.
Ronak: Yeah, sure. I mean, as I mentioned before, we know that the evolution of, of PropTech and your tech strategy is an ongoing thing. And in particular, you know, in like markets, like the Australian market and also the UK market, we’re still learning from those that are maybe a step ahead, for example, in the States that have been doing this for kind of 30, 40 years in the rental living space, for example. And I would say that the, the need for improved technology in this space is driven by the maturity of the market. And if you think back to five, 10 years ago when the first Build to Rent to properties were coming out of the ground, there was no customised technology or PMS platforms or leasing solutions for these type of models because built to rent was a relatively new concept at that point. But now that we’re maturing, there is a need, now that demand is growing, portfolios are growing, customer expectations are increasing in terms of what type of service they’re receiving throughout the process. There is a growing need for different tech solutions in that space. And there are providers that are now available, you know, for portfolio owners or operators to use to plug in to improve gaps or challenges that they’re facing in different spaces. So, I’d say kind of my leaving thoughts on this space is that it’s really important to think about the decision-making framework for your technology strategy and how you build your tech stack within the residential space. And there are a number of criteria that I think you should consider when you’re deciding what direction to go down. And the first one is obviously the budget and the total cost of ownership of that solution or your PropTech stack that you decide to build. And that might be determined by whether you decide to build your own tech stack, you’re using a hybrid model. So, you’re kind of picking and choosing the best solutions in the market, but requires slightly different capabilities internally to run it. Or you just outsource a lot of your property management and associated capabilities to a third party like a yardee, like a real page, like an MRI, for example, to run and operate those buildings as per their particular standards. All come with pros and cons, all come with different budget and cost requirements. So firstly, determine how much are you willing to invest on this solution and for how long? I think that’s the key thing. What’s the total cost of ownership of this, this technology platform that you’re looking to build?
The next thing need to think about is how fast you need to get to that point. Now, do you need something up and running today, tomorrow, in the next week, or is this something you’re willing to invest in over the longer term that could take years to evolve, especially if you’re thinking about building something yourself? Because that would very quickly determine what type of route you want to go down and what type of cost profile that you might need to allocate for a new solution or an evolution of your tech stack. The third thing is thinking about the capabilities internally to manage the tech that you’re bringing in or you currently have in-house. We talked about legacy systems earlier on in the conversation, and then we found that a lot of teams are heavily dependent on the tech teams that have grown with the tech stack over the last five and 10 years. And that’s because a number of workarounds have been delivered. They’re sometimes become a single point of contact or a single point of failure maybe for a particular solution or resolution if there’s a system problem. And that becomes very tricky to manage and quickly the technology will become outdated along with the capabilities and the team that you have to service that. So, it’s really important to think what type of internal capability you’re willing to build or you have in-house already. And are you willing to change or evolve that? And if not, you know, if you’re going to keep it the same, what is the right solution for the, for the old growth ambitions and your scalability for the future.
The final factor then is about risk and control and how much risk you’re willing to take with the data that you’re managing and the approach that you take and control over the data. And in particularly for the client that we originally delivered this report for, one of their key objectives was really to be able to take more control over the data they have because their portfolio is so large, they felt like they weren’t really getting true access to the insight and the analytics that they should be drawing from the data they’re collecting within their portfolio. Now, again, depending on the route that you take and the strategy you have, some options will give you total control over that data and the information you’re collecting. That also comes with the increased risk of managing that data and the increasing requirements of capabilities to manage that as well. Or you may work with third parties that manage that data on your behalf, but you’ll then tend, you tend to be at the mercy of how that third party is translating that data and how that third party is providing that data to you. And it might not always be completely fit for purpose for your needs, which then means you either have blind spots or not full visibility over the data that you’re collecting yourself. So, I think there’s a number of criteria that everybody should be going through, in order to determine what the right solution is for you. And the final bit that is very kind of market specific and definitely applies to markets like Australia as well is, what is the regulatory pressures that you have to adhere to? Who are the political or the government interfaces that you need to provide data to? Are there specific requirements that you’re required by compliance to deliver? Are there things like deposit schemes, rent controls, that might be unique to your particular market. That will again determine how effective your technology is and whether it’s also compliant to your local jurisdictions and requirements from a policy perspective as well. It’s not an easy decision. It’s something that everybody needs to go through at their own pace. We can help with the decision-making framework, if that makes sense, so that each individual client operator, owner, developer, whoever you are, is working towards the right solution and the right tech stack that’s fit for purpose for your portfolio.
Richard: You’re certainly a wealth of knowledge. I’ve known that before. And no doubt there’ll be a number of people wanting to reach out to connect with you to just pick your brain on more asset specific advice. I do know we’re running short of time today, which is perfectly fine, I wanted to let you just educate the whole bunch of our listeners on, what I’ve just realised over the last 40 or so minutes is certainly a space that I don’t believe a lot of people have fully turned their minds to just yet because of the nascent stage still of the emerging stage of BTR and co-living in Australia. Just to close this session off, was keen to just get a little bit of insight with both BTR and co-living in the UK. How is that market performing? how has it performed over the last 12 months?
Ronak: Yeah, I would say there’s probably, I’m about to deliver a mixed set of feedback, if you like, in terms of UK BTR development. We’ve seen, for example, that the latest data from the British Property Foundation here in the UK, is showing that for Q1 in 2026, for example, there’s been record investment in this quarter since the pandemic, actually, with nearly £800 million worth of investment going into Build to Rent schemes and developments. This is driven by a 12% rise in units, so we’re looking at nearly 150,000 units across the UK in the built red space at the moment. However, whilst that growth seems positive and investment in the space is growing, we are facing challenges in construction. We’re facing challenges with planning processes and efficiency of getting developments through planning. We’re under pressure from new regulatory schemes and the safety acts that have been delivered recently. There are challenges with building high-rise buildings. What we tend to see and what I’ve seen from our perspective with the clients and investors we’re speaking to, is that there seems to be now a polarization of Build to Rent developments here in the UK. What was traditionally focused around the old multi-family developments, so typical one, two, three-bed apartments, you know, a typical scheme could be anywhere between two to four or 500 units across multiple floors. We’re now seeing that there’s a lead to either the single family market, which has delivered over 50% of investment over the last year in the UK. And that’s mainly driven by things like the Building Safety Act, planning requirements and the pressure for investors and developers to keep building homes. I think similar to Australia, we’re going through a really significant supply shortage at the moment. In the UK, there was an ambition to build 1.5 million homes over the next few years. And to be honest, we’re only at 5% of that target. So we’re way behind plan. And that has driven a lot of investors that might have traditionally moved into the multifamily space to think about alternative options, such as single-family housing, garden and suburban-style housing, which is more mid to low-rise. So, they don’t have to navigate the more complex building safety act requirements. They don’t have to navigate the more intense planning policies and procedures for inner city and urban areas, but they can still deploy and build at a pace and meet their housing building targets as required.
And then on the other side, we’re seeing a massive increase in co-living at the moment. And this is again, not unique to the UK. We seem to be getting requests from all over the world actually on the co-living side of things. Actually, in Australia, we have three clients, active clients at the moment in Sydney, that are all looking at building new co-living developments. All of them looking at building kind of industry leading, benchmark leading developments, which are hopefully going to be kind of game changes to the industry. So, I really hope our advice is going to pay off when these developments are built. Also in the Middle East, one of the few models in a pure BTR sense to emerge at the moment is a co-living model based in Dubai. Whilst the rental market and sales market in the Middle East is hot, it’s still not a traditional institutional BTR like we would know it in Australia or in the UK. I think people are either going really big and going all in on high-density, really tall schemes. For example, is a huge scheme in Croydon in London, which is one co-living tower, 48 floors, 817 units. It’s the largest kind of volumetric tower in Europe, I believe it is. And that is almost an example of how people have gone overboard on the co-living side, if you like. But, you know, it’s a landmark scheme that a lot of people are looking to replicate, I would assume, over the next couple of years. So, it’s either all in on the high-density side or you move out of their inner city areas and think about deploying rental solutions in a slightly different model, whether that be single family or mid to low rise. So, it’s a shame that there has been a bit of delay in that core multifamily market, if you like, but I suspect that as the market evolves and people get used to the processes, they find solutions to efficiently get on the building safety act and planning processes, we will see more investment into the multifamily space as well. So yeah, I suspect that we see more around that around the world, and I’m looking forward to working with, with clients all over the globe and in particularly in the Middle East and Australia to see how these developments land for the future.
Richard: Fantastic. Well, look, thank you very much for that, very good summary. As I said, no doubt there’ll be certain listeners, either the finance, which is coming from a lot of the destinations that you’ve named or certainly, the developers and operators that are based in Australia reaching out to pick your brand. You’ve always been very kind to me in terms of sharing information. So, I’m sure you’ll be able to actually chat with them and obviously get involved with their projects one way or the other. Ronak, thank you very much for again, taking the time to come on the show. And I look forward to seeing some more of the publications that you guys are starting to put out. Please do let me know when you’re next in Australia. Perhaps we can actually go and have one of those surfs if you’ve ever tried it before we come into the office and give advice on either BTR or co-living schemes.
Ronak: That would be great. Thank you, Richard. And thank you for having me.
Richard: Hi everyone, I hope that you really enjoyed the episode with Ronak of GAA. I thought it was really insightful and the three key findings that I would please like you to take away are as follows. It’s clear just listening to him, the importance of data and evidence and just how important it is for various evidence-based decision making to be made. And I thought it was very interesting when you actually heard him talk about the various stakeholders involved in um different parts of the operating model and how important data and evidence is for them. I hope that you picked up a lot of ideas as to what data and evidence is required. However, I would certainly also encourage you to reach out to Ronak if you need further details on this, on these metrics. Second point that I thought was very telling is also the tech stack, the different types that are out there. But certainly, whether you’re going to build your own one or whether you’re going to use one that is already built. But the role that they can actually play in driving operational efficiencies and ultimately improving, NOI and the validation of the assets. I think that that’s probably obvious, but really critical to get right at the beginning of the process. It occurs to me that this needs to be done. Also again, at the beginning of the process with an aim to scale across the entire portfolio. I think that’s really some food for thought for everyone.
Finally, then I was, again, reminded when I speak to people from overseas markets where they are more mature markets, they’ve gone through more market cycles in Australia, just the opportunity as well as the lessons learned from exploring overseas markets. And whilst I do a lot of the research myself, which is what I love doing and it is my day job, I would encourage everyone to talk with people from overseas markets and really ask them what lessons they’ve learned. I think that goes a long way to actually helping. You understand the asset class in this case being BTR or co-living, but then also de-risking your investment and your development decisions because there’s lessons that you can learn from overseas to hopefully apply to your projects, so you don’t make the same mistakes. Anyway, that’s all from me. I hope you have a lovely rest of week. Thanks very much.
Disclaimer: Precisely Property is a podcast presented by Charter Keck Cramer and is for educational purposes only. Nothing in this podcast should be taken as investment or financial advice. Please engage the services of an appropriate professional advisor to provide advice suitable to your personal circumstances. The views expressed by our podcast guests may not represent those of Charter Keck Cramer.
