Property Marketing Trends, Mixed-Used Schemes and Affordable vs affordable

In this episode, we talk about what we're seeing in PBSA marketing, mixed use schemes and how communal spaces could be utilised for the public and Affordable vs affordable homes.

We believe in supporting the innovation of homes and communities that are welcoming and fair for everyone. This episode is all about sharing those ideas and celebrating equality in the shared living sector.

Give it a listen to catch up on all these topics and more.

Housed: The Shared Living Podcast aims to bring the latest news, views and insights to the shared living sector.

Each week, Sarah Canning, Deenie Lee of The Property Marketing Strategists and Daniel Smith of Student Housing Consultancy will be delving into a wide variety of subjects and asking the questions that aren't often asked. This podcast is for anyone who works in Student Accommodation, BTR, Co-living, Operational Real Estate or Shared Living.

Disclaimer: The views and opinions expressed in this podcast are the personal views of the individual hosts.

Transcript

SPEAKER_01: 0:00

Hello and welcome to the fifth episode of Housed, the shared living podcast. I'm Sarah Canning from the Property Marketing Strategists.

SPEAKER_00: 0:10

I'm Dan Smith from Student Housing Consultancy.

SPEAKER_01: 0:12

And I'm Dani Lee from

SPEAKER_02: 0:15

the Property Marketing Strategists.

SPEAKER_01: 0:17

So we're a few episodes in now to our brand new podcast. How are we all finding being podcast hosts? What do you think, Deanie?

SPEAKER_02: 0:25

Oh, I'm quite enjoying it, actually. And I'm really enjoying the chats that we're having. And it feels like we're really getting into some juicy subjects and learning from each other and delving quite deeper into the sector. And Obviously, hopefully our listeners are also getting that. And I think that's good. I think it's a really nice format to be able to just get asked those questions that lots of people want to ask people and don't really know where they can get the answers. And hopefully we can give a little bit of that to people.

SPEAKER_00: 0:58

I think it's nice to keep it conversational as well and have a bit of a chat as if it was almost networking. You know, I think a lot of the events that we go to, there's a presentation and typically someone with a bit of a monologue it's nice to be able to actually have a bit of conversation bounce ideas around as well because we don't have all the answers as to what's best practice you know we're working everything out as much as the next person so I think it's really important that we can be quite open to that and have those conversations with all of the people that are messaging in as well after each podcast we've had quite a few people just with questions topics thoughts on you know what's been covered and you know that's great to see and we'll try and bring those up as much as we can

SPEAKER_01: 1:38

I find it time saving I know that sounds But I think that I spend so much time having these conversations on a normal week with you guys, with other people, probably with a lot of the listeners and on LinkedIn and with my long suffering partner. And actually, I'm saving all of these conversations up. for the podcast now you know constantly writing notes down you know we've been sharing lots kind of off air and you know we could talk about this have you seen this article have you heard what's going on here so actually I feel like I'm kind of condensing it into into the podcast rather than kind of spending a lot of my week having a lot of these kind of conversations.

SPEAKER_00: 2:16

That's always the thing with being a consultant as well. Like, you know, how much do you give away in a sort of 15 minute phone call and how much are we willing to kind of put out there before we start charging people? That's the key thing that I've always struggled with as a consultant. There's plenty of people out there that I'll, you know, happily give a free bit of consultancy to, but, you know, it does get to the point where things start taking up a bit more time. This, as you said, Sarah, is just condensing everything. So it's allowing us to put more information out there, talk about some pretty juicy topics that not a lot of other people really talk about for fear of upsetting certain parties. And I think we're well placed to do that and it will save us time in the long run.

SPEAKER_01: 2:55

Right. So one thing that we're getting asked quite a lot of the property marketing strategists is about trends and challenges and, you know, what's everyone doing during the marketing season, really. And we just wanted to spend a few minutes talking through what we're seeing in the kind of the wider property industry. And I guess to kick things off, one thing that we get pulled into a lot of conversations during our consultancy is when to market and when not to market. And I think from an investor point of view and from an OPEX point of view, I think it's quite a simplified view to think when things are going well, stop marketing and then turn it back on when you need to and if we take the the pbsa cycle for for example you know or the wider student accommodation cycle you often you know start season really well you slow down marketing and then you can pick it up again if you need to but from a marketing spend point of view that becomes really really challenging because you can't just turn marketing on and off and you If you do that, it will cost you more in the long run. You know, thinking that a property doesn't need any investment into SEO, for example, but then suddenly it does because it's not performing very well. That takes years and months to actually build up. And in the meantime, you're spending lots on PPC. and other digital advertising. So it's kind of a false economy. Dini, what else have we been asked? I feel like we have this conversation a lot.

SPEAKER_02: 4:25

We do. And I kind of wonder whether as well, just that aspect of it is very much around the education piece, which is kind of what we set out when we launched the property marketing strategies is actually how do we educate people a bit more and how marketing works. And because I think it's too easy for an investor to sit from a very distant place and just say, oh, well, that's false. So why are we spending money on marketing? And like you say I think it's about that education piece of well marketing is not just about this year and this This booking cycle, it's actually about making sure you've got enough of a foundation that you don't have to spend so much money and do crisis marketing, which is what we see a lot of times when we get to that point of, oh, things aren't where we are, just chuck some money at it. And it's that strategic, I guess, approach and that education piece to really understand what those differences are and where that spend differs.

SPEAKER_01: 5:18

One classic example that we see a lot, and Dan, I'm sure this will resonate with you, is that about marketplaces. It's kind of well, we need you now. No, we don't need you. And oh my God, I need you now. And it doesn't really work like that, does

SPEAKER_00: 5:32

it? No, it doesn't. And that's especially true for the marketplaces themselves, because what they need is consistency. And unfortunately, the way things have been over the last few years, they've just had complete volatility to deal with. So there hasn't been a sort of foundation for marketplaces to really build on with individual operators. Now, there are some operators out there, some of the larger operators typically have a good sort of basic foundation and they will bring in marketplaces to work on certain properties as and when they feel they need to. But they will have a core of bookings from those marketplaces. So the marketplace can sort of rest assured a little bit knowing that they'll be able to place X amount of bookings into that operator and then work with them as and when needed. But, you know, as with the demand, the sort of supply demand imbalance that we're seeing in certain places, operators will typically hold marketplaces now to, to specifically fill the likes of beds in Coventry or Sheffield or Colchester or Leicester, depending on how those markets are doing. That's a real difficulty for marketplaces because what they really want is the beds that are easy to sell. Of course, they want access to the beds in Bristol or Glasgow or various other locations as well, not the beds in those oversupplied markets that are sort of slightly more mature. So it's a real balancing act that might marketplaces have to find and they are completely beholden at the moment to the operators. until the point that they get to, you know, they're ultimately too big to turn down the bookings and they can dictate the terms a little bit more. But realistically, I think now there's only a couple of good places and that's U-Homes and Amber that are actually too big to turn down. And I think that's a real challenge for any of the other marketplaces that aren't quite doing those numbers. And they might be focusing more on conversion rates or more on certain locations, but you can find yourself quite easily having your commission mission turned off on certain locations because Nottingham's about to sell out or Bristol's about to sell out or has sold out or whatever and then you have to completely put all of your efforts into Coventry or any other location and that you know that just makes it really tricky to manage but this year we've actually seen some of the operators pushing back pretty hard on domestic bookings and saying actually we're not going to pay you for domestic bookings that you send to us because what we see marketplaces as is a bit of a reach into international markets an extension of our sales and marketing team in India or Malaysia or China or wherever we don't want you fishing in our pond as it were and giving us domestic student bookings we're already they're already here that's our job you know we can do that and so I think there's some marketplaces that will fall foul of that this year depending on how the sales cycle goes because of course later on in the season if there is availability in some of those key locations as you know personally I suspect there may be then the taps will get turned on again and those marketplaces will potentially try and turn the screw on the operators to say, give us the domestic bookings again. So it's going to be a really interesting year for marketplaces. That's for sure.

SPEAKER_02: 8:45

And that's a really interesting topic and a question that I've always had is how you manage that process or can you manage that process of marketplaces only sending you international orders? students. So what do marketplaces say back when an operator says, well, I do only want those international students, don't send me domestic? How do they manage that?

SPEAKER_00: 9:06

Oh, that's a tricky one. Everyone's got a different response to this, but ultimately this is a bit of an evolution, but it's primarily an evolution out of the Indian marketplaces. In China, they will focus on getting Chinese bookings into the UK. U Homes, I think, last year had about 0.2% of their bookings were domestic UK students. You might've seen some of the bus adverts that Jason at U-Homes had in several cities. Well, they're only driving 0.2% of domestic students, whereas some Indian marketplaces are taking upwards of 50% through domestic students. That's a challenge for operators because, again, the likes of... University Living, Uniaco, Casita, Amber, they sort of started purely sending Indian students over to the UK, but then realized that they could scale and grow with UK students. And that was never fully frowned upon. until the operators started getting to 100% occupancy again. So it was pretty much last year that there was a lot of pushback from the operators. And I think part of this was also driven by a very high cancellation rate as well. So it's not just the fact that operators wanted to use marketplaces like a tap to turn on and off. I think there's a lot of the work that operators are trying to do is actually trying to build best practice within within the marketplaces to drive down the cancellation rate and improve the conversion rates. They don't want leads, they want bookings. And so I think the marketplaces are usually sort of up in arms about having their commission turned on and off, whether it's for domestic students or whether it's for certain locations, especially if there's availability in those locations, but the operator feels like they'll fill the beds direct. But the operators are well within their rights to say, look, We are guarding our cost per acquisition. It costs us more to fill a bed with a marketplace. And this isn't all the time, but you know, the majority of cases, it costs more to fill a bed with a marketplace than it does through a general sort of direct let channel. The issue is that the marketplaces then have no consistency and they struggle to then build a foundation of a business around that. Now, we're lucky, I think, as an industry that we have, you know, four or five very credible marketplaces out of India, same in China. There's several popping up in the UK that are trying to build that foundation and that they will know that they will have to sort of scale up and down depending on time of year and, you know, the amount of availability that there is in the market. So, I think everybody has to sort of play the long-term game here. Operators do have to be mindful of the fact that marketplaces should be sort of adding value here. Marketplaces have to be careful that they're not stealing value, that they are really adding to the ecosystem. And that is as an extension of the operators, marketing and sales teams. So it's a really fine balance. I think there's a few marketplaces and operators that have got the balance a little bit wrong at times. And this year, I think will be more interesting than most with a couple of the bigger operators telling the marketplaces they're not going to pay commission for domestic bookings. If that continues towards the end of the season, yeah, I'd be very interested to see.

SPEAKER_02: 12:25

I think it also is something that we see a lot and why we talk about the strategic approach to how you're filling your beds is that there's an understanding between which beds you want to sell to marketplaces and which beds you want to sell by direct. And there are different budgeting systems. There's a cost per sale and there's a cost per lead. And I think there's a lot of work that can be done around really actually understanding before you even get into the selling season actually planning and digesting and executing a marketing campaign based on on that strategy of where you're going to sell what and not just a quick as i say crisis kind of marketing oh we've got some beds let's just chuck them at marketplaces because then we can get rid of them it's kind of a defined strategy i

SPEAKER_00: 13:12

think there's a there's a bit more of a strategic long-term approach at the moment and And what makes me say that is that, you know, I speak to marketplaces, obviously, but also you can see on LinkedIn that the likes of Matt Merritt from IQ, Spielbe from Vita, Bay Downing from Downing, and several others are heading out to India and China and really sort of courting the marketplaces, as it were, like trying to fully understand their business, understand how each operator fits into that ecosystem, because it's not just about a marketplace paying for Google ads in the UK they have agent networks they have university networks they have local networks and they're leveraging those to bring students into the UK as well it's not just that they're purely putting those domestic students so it is a fine balancing act it has to be a long-term strategic play from the operator and from the marketplace and like I said luckily we've got some you know seriously good marketplaces very professional they can get aggressive at times in terms of their sales processes and techniques but Some of that is healthy competition. Some of that is, you know, it can get a little bit overzealous, as we've seen in earlier episodes with some of the fake bookings, etc. But for the most part, you know, it's a mutually beneficial ecosystem. It just every now and again needs recalibrating. And I think operators have started to recalibrate it this year to kind of get control again of those marketplaces. And the marketplaces will have a bit of a whinge, push back a bit and, you know, ultimately start to Start to think about how they can scale in other areas or with other operators or whatever it might be. But I think the foundations will always be there. Marketplaces are here to stay and they are an extremely important part of the sales and marketing process.

SPEAKER_02: 14:58

And I think we'll come back to this topic time and time again. And I think one thing that we haven't touched on is kind of how there is a bit of a resurgence in brand in property. So I think maybe that's topic for next time. But I'm keen to probably discuss some of the other things that's on our mind this week. Got to get through Sarah's... digests of stuff that she saved up.

SPEAKER_01: 15:17

Absolutely, my brain dump. So next on my list is private and public amenity space. So I recently stayed in a room two in Belfast. And I think, you know, the three of us have spent some time staying in various different social hubs, Europe. And, you know, I think I'd speak on behalf of all of us that we love the vibrancy of those kind of places, the hustle and bustle, the constant kind of revolving door of different people, you know, kind of coming through the door, whether that's to eat food or to study or to plug their headphones in and work in the corner, whether they live there, whether they work there or whether they're just staying there for one or two nights or a week. And it's not something that we see a great deal of in the UK, but it seems to work really well in mainland Europe. We've chatted with Frank from the social hub a few times about how that can be replicated in the UK with our very stringent health and safety laws and fire safety and you know that kind of breaking the barriers down and being a little bit more open to to being less secure. The buildings are still secure, but it doesn't feel like there's a barrier, which a lot of PBSA, BTR, co-living buildings in the UK have. So yeah, let's open it up. Dan, what's your take on the kind of the public-private space? Is it something we're going to see more of in the UK?

SPEAKER_00: 16:41

I think it should be, personally. The best example that I can give in the UK at the moment, and there's quite a few sort of co-living spaces that are trying to do things differently, but the Sugar Cube in Sheffield, I I don't know if you know it. It literally looks like a sugar cube. I think there's about 60 odd beds, sort of Scandi design. So it's quite minimalist, but that looks effective and it's cheap. On the bottom floor is really good reception, an absolutely buzzing cafe bar scene. It was completely rammed. I went there to have a look for an investor and it was just completely rammed. It was such a good use of space. It brought people in. If I was looking at other accommodation areas, accommodation in Sheffield, which which as, as we know, there are a lot, I would be thinking, right, this is really vibrant. It felt, it felt safe because there was a sort of way to get through to the student accommodation. You could also block off half of the space, but, you know, super profitable concession in there for later on. And it, it just, it really worked. And I, and I think there, that sort of blended living that the class conference has really sort of pioneered and, and that's, And when I say the class conference, I mean, that's the typical exposure that we get to the social pub and, you know, formerly student hotel. And that's the best example, I think, across Europe of blended living where you have the students and travellers and tourists and it's co-living as well. It's a complete mishmash. Now, I remember seeing student hotel come across the desk when I was at Roundhill and thinking, I'm not sure an investor is going to go for this because blended living was such a new concept. And I think that now there is a real focus on how can you integrate with the local community? How can you give a little back? How can you have different sort of demographics, whether it's a young professional, a student, et cetera? A lot of investors are looking for a bit of a defensive play. There's a little concern in places like Sheffield or Coventry or any place where you might find a little bit of oversupply that you need a change of use at some point. So you need to be able to house young professionals if you're not going to fill with students, et cetera. So I think it's going to become more and more important, you know, sort of community led blended living spaces that are enticing people in, not just students, but, you know, across the board. And that's where co-living really can come into its own. So, yeah, I'd highly recommend having a look at the sugar cube and just try and catch it on a, it doesn't remain matter when you go there, it will be full and there'll be half the residents there and half students too. So that's a really good example of how to do a sort of third party cafe concession stroke social space really well.

SPEAKER_02: 19:29

So it is possible then within the regulation to make it work. So the idea that It's not possible. It might be more complicated. It might be harder. You might have to jump through a few hoops, but it's there. And, you know, you can work with the regulation that we have in the UK to make it happen, which

SPEAKER_01: 19:45

is the key is technology. You know, we we're not saying that the building should be a free for all for everybody. But with, you know, FOB entry with, you know, the right staff, with the right layout. I think it can work I mean the in room two you couldn't go in the lifts if you weren't a resident but on the ground floor it had a great restaurant and cafe and kind of co-working communal space so it can be done and I would love to see it because you know so many particularly student buildings are really empty during the hours of nine to five and not only is the space kind of underutilized but I think it doesn't create a great atmosphere and quite often you know the the students end up using the spaces in the evening, which is great because you can also have this kind of AM to PM sort of arrangement. You're in the right location and you've got the right use of space on the ground floor. And it's open and it's welcoming. I mean, the social hubs that we stayed in, kind of most of them have sort of cafe seating outside. So immediately you can see that you're welcome, that there's a route in and you can access it without having to press a button at reception and get buzzed in, which I always think creates such a barrier and isn't massively welcoming.

SPEAKER_02: 21:03

I think we spoke about this a few episodes ago about kind of the use of city centre buildings and retail outlets into homes and it kind of using this space as this community aspect is a great way to bring life back into many of our town centres that have been completely depleted. So I think there's a lot to be said about really thinking about that that amenity space.

SPEAKER_00: 21:26

I think that's going to happen more and more. I read the other day, there's sort of 200 odd Debenhams that still haven't been converted. They're still empty. And they are obviously, typically right in the center of a high street of a town or a city. And yeah, it's a little bit challenging in terms of light and social space, et cetera, and the room mix. But There's definitely more that can be done with existing buildings to bring people into a city centre, both to live and to work. And I think that's what we should start seeing a bit more of, you know, more refurbs, more people thinking, right, that building's derelict. Actually, what could be done with that? Because there's no more sustainable building than the one that's already been built. And I think as investors focus a bit more on sustainability, I think there will come a point when they have to sort of realise that, Okay, yeah, we know that the margins are much better in development, but actually in refurbishment, we will get a quicker result and we can turn around a building that will... bring in the local community. It will make sure that, you know, the students or young professionals are fully integrated and really add value to that town centre because, you know, they are, as you said, Deanie, they are, well, a lot of them are pretty dilapidated. So, yeah, I think there's a lot of work that can be done and we're starting to see that. And Jopling House in Sunderland run by Grayson's is a good example. It's a bit of a basket case of a building in terms of the way some of the layouts are, but it's definitely worth it. and will continue to work. Then there's, you know, numerous others, University of Gloucester in Gloucester have just taken over their Debenhams. And so they're creating faculty buildings. Tudor Hill has just taken over an office building in Nottingham City Centre. There's a lot more that could be done. It's just a case of, you know, beating the streets and getting out there and having a look for those buildings. That's the key.

SPEAKER_01: 23:24

I think we're all really keen to see the new social hub in Glasgow because that is a refurbished department. store in a city centre so I think if anything can kind of exemplify what we're explaining here it will probably be that building. On to a slightly different topic it makes more sense written down than verbally but the difference between affordable with a capital A and affordable with a small a so you have to be a bit visual with this one but where I'm coming from is We've heard the missing middle being discussed quite a lot, particularly in BTR. And what that really means is that there are affordable homes with a capital A that are being built for people who are means tested, who qualify for help with their housing. And then you've got affordable with a small a. which is really everybody else who can't quite qualify for help with their housing and they won't be housed in affordable homes. But they're still looking for affordable homes. And BTR hasn't quite gathered momentum really with scale to be able to offer that yet. So the investors are obviously... massively interested in the big returns. And that's where these big fancy buildings with lots of amenity space comes in, but they come at a cost. So they're not really yet offering an affordable option. You know, we've seen the same in PBSA, but you know, arguably in PBSA, there isn't even affordable with a capital A. You know, there isn't an option for people that really need help apart from, you know, various different bursaries and scholarships, which universities provide, but away from that kind of university setting, it's quite rare. So I guess that's my question to you, Dini and Dan, really, is kind of how can shared living become more affordable for the people that are don't have big budgets and just don't qualify for the lower end of the scale either.

SPEAKER_02: 25:27

Yeah, and I think we discussed this briefly again on a previous one around this idea that actually the BTR sector does have a role to play in the housing crisis. And actually, it's one of the key solutions enabling us to build enough houses to break down the demand issues we have. But like you say, if we're only building... one segment of the market it's not going to solve that problem. How we solve that I don't know and I don't know if this comes to one of our ongoing topics around actually as a sector we need to be working closer with the government and collaborating better with local authorities to understand actually these are the challenges to how we can build or why we can't build affordable homes or make with a small a, affordable homes. And here's how you can help us to bridge those gaps. And I guess just like we always say, we don't always have to keep building the same thing. There's lots of different ways and product diversity that we can put into a building or into different buildings in a city. And actually, do we need to think a little bit more outside the box and be a bit braver in how we're planning these developments?

SPEAKER_00: 26:36

We do, but the issue is that being a bit braver typically means making less money. And that is one of the core problems that we have in the affordable sector, because studios typically make a lot more money than clusters. Clusters are typically cheaper for people to buy or rent, rather. And that goes across the board with co-living, BTR, etc. It's It's just a real challenge to get investors to buy into affordability because they know that they can make more money in the sort of higher end side of the market. That's why we've seen such a real focus from PBSA in particular on studios and on focusing on the Chinese market in particular. And I think that the affordable side is something we've certainly neglected. But without more government sort of intervention, as it were, which we're definitely not going to see anytime soon, I can't see any investor, developer, operator in BTR, co-living or student in particular, really going after the affordable sector in a big way. That's the main issue that we have. It's driven by the investors.

SPEAKER_01: 27:47

I wonder about single family housing, though, because that can be built... much lower density than we see in traditional BTR multifamily living. It has less restrictions because you can build a small development of houses pretty much anywhere in the UK. You're not reliant on small footprints that you have to go high rise that you do in city centres. And it seems like there is a lot of appetite for single family housing. And yes, it's much smaller scale but as an investor you can get a return quicker because building say a development of 30 50 houses will take much less time than building you know a 20 story apartment block and I don't think they're being marketed as affordable, but they don't have all of the amenities. You're not running gyms and swimming pools and 24-hour concierges because it's effectively an estate of houses to rent. And it seems like they're being really well considered where they're being built. So they're built in towns and villages where people can access the amenities. So you're not reliant on them being there. So yeah, I think that's one to watch. I don't yet know if we've got scale enough to work out if it can meet the demands of that missing middle but I think it's getting there.

SPEAKER_02: 29:13

I think this is a topic that we could probably talk for a long time on and I know we probably don't have time now to talk about it but one I'm sure that we'll come back to and a really important one for country and housing in general so I Yeah, really fascinating. And I hope you do come back to it. But I think we probably do have to close for this episode now. So thank you to all our listeners for joining us again. Do let us know via LinkedIn, email, whatever way you want to let us know what we should be chatting about or any other topics that you want us to cover. This podcast is really about all aspects of shared living. So if we're not covering something that you think we should be, then drop us a line. And thanks again for joining us. And we hope to catch up with you soon on episodes Thanks.