08 May PLATFORM_ soul: Jean-Marc Vandevivere interview
Jean-Marc Vandevivere looks down on his former employer. His stance is literal rather than attitudinal. From PLATFORM_’s boardroom, he has a view out over the offices of British Land, where until the end of last year he was head of residential.
The chief executive of the build-to-rent (BTR) developer-operator has nothing but warm words for the property behemoth and says his decision to cross the street was born out of a desire to play a leading role in the emerging market.
“I loved my time at British Land – I had a fantastic seven years,” he says.
“I made a lot of friends and I learned a lot; hopefully they would say I did a lot for the company too. But there is a time for everything. Every large corporation has its priorities and I think they will develop a business in BTR, but I wanted to do it sooner and faster. And the only way for me to do so was to make a decision and take the entrepreneurial path.”
In the short time Vandevivere has been at the Westrock spin-off, he has started as he means to continue, embarking on a joint venture with Invesco last month and, as Property Week revealed last week, securing a new site in Sheffield that will accommodate more than 300 homes.
Now he reveals the next steps in the company’s ambitious growth plans and why he believes BTR is on the cusp of becoming a mainstream investment asset class.
The Sheffield deal will increase its portfolio by 50% in one fell swoop. PLATFORM_ now boasts 600 units across five operational assets – in Bedford, Bracknell, Crawley, Exeter and Stevenage. Vandevivere is understandably extremely bullish about the BTR sector and he has a more positive read on its inexorable rise than most, who put it down to young people being unable able to buy a home.
An interior of PLATFORM_’s Bedford scheme
“There is definitely an affordability issue in this country,” he says. “I would be lying if I said there wasn’t. But I think the new generation is evolving and I don’t think owning a home is as important as it used to be. We want to take that forward in a positive way.”
When you walk into our buildings you don’t have a key. You can open your door with your phone
The product PLATFORM_ has developed has been designed with this younger, less settled generation in mind. That means close attention to design, but also a commitment to technology. “
We wanted to be tech savvy,” says Vandevivere. “This generation is tech savvy so the product needed to respond. So when you walk into our buildings you don’t have a key. You can open your door with your phone. You can control the temperature with your phone.”
Technology is also used to canvass residents’ views on what they want from a building – views on gym equipment, for instance, were crowd sourced – and to help them socialise.
- Vandevivere has 20 years of experience in the property, retail and consumer goods industries
- He spent seven years on the executive committee at British Land, joining as head of strategy in 2009 to set up the new department and later becoming head of residential
- Started his career at The Boston Consulting Group, spending time across the Paris, Washington DC and London offices as a principal
- Sits on the IPF strategic board and the British Property Federation residential board
- Has an MBA from ESSEC Business School in Paris
“Using an app, people can book the social space and invite everyone in the building,” says Vandevivere. “So if there is a football match, you can invite everyone. We are enabling residents to take control of the buildings.”
While its schemes may be designed for footloose and fancy-free young people, Vandevivere says they also hold appeal for young families.
“With the quality of the product we are providing, we are attracting families as well,” he says. “Whenever I visit a building, I see parents with children and it’s not that they were tenants before and then had children – they’re choosing the building with a child.”
Another way PLATFORM_ is hoping to differentiate its BTR schemes is by offering longer leases as standard. “I think [having longer leases] provides some security to residents on how the rent will be revised,” reasons Vandevivere.
“It’s a great approach that separates people like us from individual landlords, who make up 98% of the market. A small proportion of those are rogue landlords that abuse their dominant position and make sure they extract as much as they can every year from their residents.”
Indeed, Vandevivere reveals that in keeping with government proposals to introduce longer leases, he is working up plans to only offer three-year leases in the future.
“I will say this now, although some of my team might hate me for it: we are in the process of most likely only offering three-year deals going forward,” he says.
“Residents can still leave after a year, but we think it’s a lot easier for everyone to start from the principle of having a three-year agreement. If the tenant is well behaved and they think we have the right product and it’s fairly priced, let’s make sure we have a long-term deal together.”
Now that five sites are up and running, Vandevivere’s mind is turning to the next wave of development. The Sheffield deal takes the company outside the London commuter belt for the first time, something that doesn’t faze Vandevivere.
“We have never just concentrated on the commuter belt,” he says. “We believe that the market is deep and there is potential for the product across the country. We believe there is a need in Sheffield. This will provide an offer that doesn’t exist in the city centre at the moment.”
North and south
Vandevivere reveals that there are another five deals nearing completion. While he won’t be drawn on details, he does give an indication of their geographic spread, noting that they are “as far south in the UK as you can think and as far north in the UK as you can think”.
Including the Sheffield site, the next generation of projects would total 1,500 units if all the deals go through, meaning that in 2018-19 PLATFORM_ could hit its target of delivering at least 1,000 units a year.
One of the sites it is considering is in London, which would be its first in the capital. “We’ve got a very interesting site in London that we’re working on,” he reveals.
“We aren’t excluding London in any way. There is a lot of competition and the numbers are harder to stack up. That’s why we’ve spent a lot of time looking at opportunities and it’s been harder to find the right one.”
Bracknell has given PLATFORM_ a strong platform for growth
Having joined forces with Invesco, with which PLATFORM_ is likely to do further deals provided it takes the development risk, Vandevivere says he is talking to other investors and “like-minded partners” with a view to embarking on tie-ups “that could take us to the next level again”.
“We just have to see how we can accelerate growth,” he says. “We are open-minded about how we do it.”
The large institutions are seeing again that residential has been the best-performing asset and that they shouldn’t have got out of it in the first place
Vandevivere firmly believes that there is strong investor appetite for BTR and that institutional investors in particular are increasingly interested in the sector. He points out that institutions historically owned a lot of residential property, but that they largely sold up in the 1970s and 1980s. Now, he says, the time is right for them to re-enter the market.
“The large institutions now have to meet their liabilities. They are looking for yields. They are realising that interest rates are low and that finding yields at low risk is very hard,” he says. “And they are seeing again that residential has been the best-performing asset and that they shouldn’t have got out of it in the first place.”
The private rental sector has matured, he adds, meaning that investors will encounter fewer headaches and costs in terms of managing hundreds of individual homes.
“There is this new generation, which means that a lot of the problems in the past in terms of the nitty-gritty of managing all that stock can be done better,” he says. “People are learning from the US and there is better technology now. All those ingredients are creating a situation where residential is the best investment product for the long term.”
Assuming institutional investors do plough into the sector in a big way, it will mean that BTR has at last truly arrived. And when they come looking for investment options, you would expect PLATFORM_ to be one of their first ports of call.
Read full article at PropertyWeek