Rented Shared Living: The Experience Business - expectations, affordability, operational complexities and regulation special episode with Collegiate UK

Two weeks on from the Housed Summit at UKREiiF; Sarah Canning and Dan Smith talk with Shaan Clarke, Director of Sales, Marketing and Resident Experience at Collegiate UK and Sean McKeown, CIO, Arlington Group about the forces reshaping shared living, from affordability pressure to the rising bar for resident experience.

This episode covers; 
- What actually creates value for students?
- How regulation is changing viability
- Sector flexibility
- Operational complexities
- And why flexibility and authenticity now decide who stays competitive.

Thank you to Collegiate UK for being our Platinum Partners for the Housed Summit.

Dan Smith is Founder of RESI Consultancy and Co-Founder of Verbaflo.AI.

Sarah Canning and Deenie Lee are Directors and Co-Founders of The Property Marketing Strategists - Elevating the role of Marketing in Property.

Who this episode is for:

• PBSA and student accommodation professionals
• BTR, co-living and rental operators
• Property developers and investors
• University and higher education leaders
• Anyone working in or around housing policy and shared living

The views and opinions expressed in this podcast are those of the hosts and guests alone and do not necessarily reflect the views of their employers, organisations, clients, or partners. This podcast is for general discussion and informational purposes only. Nothing said should be taken as professional, legal, financial, or investment advice. While we aim to be accurate, we make no guarantees and accept no liability for decisions made based on the content of this podcast. 

Transcript

Welcome And Summit Takeaways

0:00

Hello and welcome to House the Shared Living podcast. Two weeks on from our House Shared Living Summit in Leeds at UK Reef, we wanted to take a look back at the key themes and what this can mean for the rented shared living sector moving forward. I'm Sarah Canning from the property marketing strategist. I'm Dan Smith from Resi Consultancy and Verberflow AI. And apologies from Deanny, who is enjoying half-term at the moment, and or hopefully enjoying half-term as much as you can when you're entertaining children and puppies. But to support us on this look forward, we are joined with sector experts and our platinum sponsors for the summit, Collegiate UK. They're the best people to introduce themselves. So over to you, Sean. Hi, I'm Sean McEwan. I'm the Chief Investment Officer for the Arlington Group. The Arlington Group is a fully integrated student accommodation platform which includes our development arm, our investor and asset management arm, and Collegiate UK, our whole wholly owned operating arm. Sean. Hi everyone, I'm Sean Clark, Director of Sales, Marketing and Resident Experience at Collegiate UK. Perfect. Thank you both very much for joining us. So we saw a lot of you guys at the House Shared Living Summit. So thank you very much for spending so much time with us. But we did notice that you weren't with us all the time, I have to say, which would indicate that you were elsewhere in the UK Reef bubble. So we would just really like to hear what else was going on at the conference. What what things are were you hearing? What were the sentiments? Yeah, what's what's your feedback outside of our lovely house chaired living bubble? Yeah,

UKREiiF Reality Check On Affordability

1:31

look, it was an interesting reef, actually. You know, we we started the year in a really positive manner, that this was going to be a much better year than last year, particularly in the uh the living space. I think Reef kind of put that put us back in our place a little bit this year. You know, just hearing out on the fringes that, you know, there are probably a couple of themes which uh luckily I got to speak on the first day, so I got to use the words affordability before it got banned, I believe, uh Sarah, later on in the in the the the the week. But that is probably the key message that that was coming out was affordability and how can affordability be delivered with all the other issues sort of going around. So now we heard that well and truly in in in in the housed summit, but everywhere else out externally is the same conversation. You know, obviously I I play around mainly in the the the the the living space and and sol, you know, the student space. So we're not talking to people at how well sheds are going. So I can't really tell you the sheds people if they're happy or not. But everywhere I went, every event I went to, every meal, the conversation was around either how do we build affordable, can I find something affordable to build, how much I want to invest, but it's too hard to invest. Then it it's it sort of played out into government intervention, taxes, red tape, etc. etc. And and that was just a theme from everything all week. Indoors, outdoors, everywhere. I don't know, Sean, what were your thoughts? Yeah, I mean it's the first time I've attended UK Reef. So first of all, I thought it was really overwhelming the amount of opportunity there to go to all the different sessions. So it took me quite a few hours on the first day to actually get my head around everything. But

Living Shifts From Real Estate

3:01

one of the the themes I felt from my experience and my area really was that you know, operational living are it's increasingly being viewed as you know an experienced business. It's not just about real estate, we're not just selling buildings and beds, it's around the experience. And what does that really mean to a customer? You know, really positively, you know, it's more recognition around operational quality and resident experience being the driving performance, loads of growing conversations around community well-being and being more hospitality-led. But obviously, the challenges around that are you know rising expectations from our residents alongside the affordability pressures and growing operational complexities to deliver that as well. It is it is challenging. But there's you know, growing recognition, which is what I I enjoyed, is there's definitely recognition around delivering successful operational living, is complex, but it's really needed to be, you know, remain competitive and have the resident at the centre of it all, not just about the bricks and mortar. Yeah, I I completely agree. I think Sean, you hit the nail on the head there. So many people talking about affordability, and and that is a real challenge, showing value to the resident, whether they're a student or whether it's BTR or later living or whatever it might be. I think that's that's the real challenge that that every operator in particular is seeing, and every investor is asking of the operator, how do we bring that that that value? So, how how are collegiate doing it? How are you sort of aligning yourself with not necessarily just affordability but but value overall? You know, where are you pitching yourself at the moment?

Building Belonging Through Resident Experience

4:39

So one of the biggest shifts is that residents obviously expecting increasing emotional value as well as functional value. We're moving from accommodation that provides just experience and you know the immunity spaces. One of the talks I went to outside of the house section was Rory Sutherland's keynote, and he was talking about the art of making the built environment desirable. And people just don't choose, just choose to live rationally, they choose based on how somewhere makes them feel. So I think that's really, really important. And we're and one of the models he referred to was the the Kano model, and we're definitely, I think this sector's definitely seeing a shift in that. So, you know, where it was gyms and cinemas are and social spaces where the differentiator, now that's baseline expectations, and the future of resident are looking at okay, what does I want value, I want belonging, I want community, I want well-being, flexibility, employability. You know, some of the things we're looking at is how do we support students through their transition through becoming an emergent adult? And you know, we're looking at how we can support them with have and well-being as an enhanced experience through GP services where you can literally call a GP through our service, where we can help them with their employability skills and build up their resilience. And we recently had Adam Petey come and speak, and then we streamed it out to all of our all of our residents to, you know, talking about exam stress, how do they manage these things? So we're really looking at how we can provide added value through coaching and supporting them through their journey with us. What I guess to link that back to what Sean was saying, the expectations of the resident is increasing, and and quite quite rightly for all the reasons you just said, Sean, that they've realized that I guess the place that you live, the place that you call home, has overwhelming impact on the rest of your life. It's it's not just bricks and mortar, it's not just a unit, but how does that kind of correlate with affordability? Because it feels like from what you said, Sean, that you're having to add so much to the experience. I guess not just to be competitive, but to do the right thing, basically. So how does that correlate with an affordable experience? Yeah, you know what? That that is an interesting question. I mean, some of the things that Sean touched on are truly important, and they're things that we we deliver as a matter of course now. And as we become a bigger group, you may have read you know recently that we've just taken over a big portfolio from for Quadrail. This helps us to be able to deliver on scale better and better ways forward with things, you know. So the smaller the smaller you are, the harder it is to be able to incorporate these things in. But affordability is is is so there's two, it's value for money versus affordability. I see them as two quite different products. Someone might think a 700 pound a week room in in London is a f is is value for money if it's got a bar and hotel room, you know, style runes and so on and so forth, but that's not affordable. So let's let's just stick to affordable for right now. We've got to pick a number that is affordable, and it's impossible right now to build affordable. It just isn't, it can't be done. There's too many problems with red tape, inflation, interest rates, construction costs, and so on and so forth to do that correctly. Yeah, it was, you know, viability was the was the other dirty word, as it were. Not that affordability is is a dirty word, it's just that it came up so much. And I I think that that uh it shows this morning. Just looking at BBC this morning, and and you can see that young people are facing a perfect storm as more than a million aren't in work or education, and a lot of this will come down to value, and you know, where do they see the value in in education and also accommodation? But I it is in in the era of AI as well, I think that is that is going to become really showcase effectively that affordability, but also that value as well. So I think this is where operators will differentiate themselves if they are genuinely focusing on the residents. And I think in the past we've seen a lot of a lot of lip service to what that could look like. But some of those measures there that you've mentioned there, Sean, like they would have a tangible impact. You know, being able to, you know, to FaceTime a doctor, as it were, like that's something that's the kind of thing that will have a real impact. But I think one of the things that I think universities aren't doing particularly well is preparing residents or students for the world of work, especially at the moment. So is that something that you feel a bit of a responsibility to do as well? Because it's not just about bricks and mortar, as you've already said, it's more about the full experience and what they can then go on to. So, so yeah, how how are you factoring in graduate outcomes and how to really prepare students into your experience?

Employability Support Beyond The Room

9:32

Yeah, absolutely. It we see it so important. So we we employ a lot of our residents, whether they work on site, they can support us in central support. Every summer we recruit um and handful of students to help us with you know inquiry management. We use AI tools as well, but there is value in that human element as we see. And so that's one area that we do do that. We also employ content creators, so varied skills, front-of-house staff, you know, evening staff. So that's one area that we see that's really important to give back to those students and help them with that. But we also are looking at our resident experience framework and and into next year. How can we tailor that more into coaching them with CV workshops, helping them looking at what what their skill gap is? You know, we're looking at things really outside of the box of okay, what what sort of needs do these students have? And each market and area might be different, but there'll be some students that'd be looking to set up businesses. Well, how can we facilitate that? Can we get certain coaches to come in and help them through navigating how they set up their business, how they go and secure funding for their you know new venture? So there's lots of ideas that we we're we're looking at, but we're also looking to tap into our own network, so people that already work with us or some of our partners to come and talk about their careers and coach them as well. So it's not just about having these big headline names, it's about tapping into our own resources and our own networks to help you know these students through navigating some of these challenges. And one of the things we talked about in UK Reef, I think I mentioned, you know, I didn't get taught anything about mortgages when I was younger or any how do you manage your finances? So there's a whole thing there that you know, well we can we can support these students, creating content, we can, you know, live stream, have people come in and and you know, coach students through that. So the I think we're moving away from the pizza and pop parties, although I think sometimes they still have a place, and even some of you know the parties that you see, you know, the hundred kids having a party, it's more around added value, coming back to the affordable piece, it's the value for money piece. So it's having the right tenancy length, it's having the right room for their needs in the right location, but actually the convenience and added you know experience that we can help them and they get something from living with us as well. Our session with uh the resident panel got a big reaction. Um I'm so delighted we were able to have that there. It was really, really important. Um, but what you're saying, Sean, I think mirrors what one of the student um audience members actually said. It was basically talking about how do they choose accommodation when they all offer so much. And I remember this particular young lady said, everyone says well-being, but what does it actually mean? How are you actually going to support me? And I think the panelists kind of said, you should delve into that when you go for viewings. You should ask specific questions, and it'd be really, really interesting to see the variety of answers because it's a bit like customer service, you know, well-being, events. Everyone says it, but it's a very, very kind of different barometer of who offers what. And it has to be tailored to your audience, your residence at that particular moment. And it might be different the following year, and it might be different, you know, the year after that as well. I just want to go back a minute because Sean, you were talking about for I don't really know why. By the time we caught up with it, everyone was calling viability the V-word, and we were like, what has this been banned? Like, what's the problem here? But clearly the A word and the V word were, you know, were sweary elsewhere. Whereas we decided to tackle them head on. The other

Building Safety And Renters Rights Fallout

13:21

things that obviously impact viability is Building Safety Act and Renters' Rights Bill as well. How are you guys navigating these waters and um what what do you think? How do you think the sector will adapt? They're just two of the uh the issues that are going to viability of a litany of issues that come through right now. Just touching on those two. The the benefit of being a PBSA provider is we're exempt from the Renters' Rights Act from September. You know, once it once our new contracts come into place, we are exempt. I think it's going to have an interesting outplay. I don't think it's going to have as big a hit on the HMO market as others believe. I'm also quite contrary in a PBSA owner's world where I I don't necessarily think it was a good idea to make HMOs a part of it, you know, because we need the housing for students somewhere. It it will help PBSA providers a little bit in that we will get a few more beds, but there are a lot of HMOs, a lot more HMOs than there are of us. So I think that that probably is is an interesting thing, and and and listening to someone on one of your panels was talking around that they've had to put a lot of infrastructure in to deal with it in the HMO market, and that there is going to be a big aggregation of HMOs, I think, into bigger providers. The Building Safety Act has so many levels, you know. I've watched our team for three years pulling their hair out, just creating the golden thread. You know, we've had to hire two, three more people in you know, just to get that data and information together, which could you imagine trying to do it on a 1960s uh tower block? You know, it's it's it's absolutely mind-boggling the amount of work that goes into that and the cost to deliver that that that sort of information. So that's looking back, it was looking forward, it obviously puts let's not look at this wrongly, the Building Safety Act is there for the right reasons, but uh it may have overshot the mark a little bit. And there's just there's so many layers that are required to get a building up, and it just adds quite a lot of cost to a development. You know, and we are seeing seeing buildings deliberately built under under under the height net limits now, you know, and and similarly this is you know why when you're looking at a good refurbishment, you will try and stand at the height limit as well, because it's gonna be more and more difficult to do a refurbishment when you hit the the point that you you fall into it again. So that's a really good point. You know, are we gonna see loads of kind of older stranded buildings that nobody's gonna want to touch to refurbish in in city centres? And like you said, by limiting the height of bit of buildings, that means limiting the amount of flats. So that limits the amount of units that are being constructed as well, which is not gonna help add homes to you know to much needed you know housing crisis. You know, we're seeing even housing developers slowing down on their delivery at the moment. The entire living sector is is struggling. I I listened to a very interesting talk on the last day on with uh you know it was a build builds rent chap sitting there and just saying how hard it is, even with grant funding, to get a building out of the ground. It's it's crazy that that could be the case. And then as as as an as as the token Australian being invited to this, I still don't get the the concept also of housing grants to build housing and then but actually a third of his construction cost is taxed. It just feels completely upside down. There are ten different departments not talking to each other doing ten different things that that all mean well but crash into each other. Exactly that. And I think that is the issue that we have with I mean, with most governments. When you when you look at when you look at housing and how important it is to everyone's quality of life and obviously affordability as a whole and the economy, it just seems that what working in silos within government just isn't working. Now, Sarah did a brilliant job of interviewing uh Minister Dixon, the building safety minister. We were very heavily you know scripted and and made you know they made sure that we had specific questions, and uh, you know, luckily they actually were able to you know go slightly off script. But they they brought the Charlie, the building safety regulator, on board as well, who was previously the assistant commissioner uh for the London Fire Brigade and was there at Grenfell. And I think what that session did was humanize that, humanize the the you know the building safety regulations uh and the building safety act, but I I think it it is a sledgehammer to crack a nut and it it is overreach, it has gone too far, and whilst the intentions are are right, you know, we should never have a grandfell ever again, it has probably led to the biggest cost, you know, viability pressure, I would say, for PBSA, for BTR in particular, because BTR is now stalled because nobody really wants to or can build, in part because there's so much ambiguity around that. But I I don't know how we can then get out of those silos and really start impacting uh impacting policy. So that's my concern that we're not seeing any great headway with any of the key bodies that we would typically see to represent us as a you know within the student housing sector in particular. Everybody is facing the same challenges. We're still looking at this 1.5 million beds uh homes target, and then we're going to be miles short of that, you know. I think it was Michael from from Collegiate UK on stage who was saying, yeah, we will hit it, but definitely not in this parliament, you know. It it's and that is the target for Steve Reed. And he said, you know, he will um he'll fall on his sword if if that is the case. But I'm not asking you to to say how you solve the the building safety regulator, but to what extent are you trying to find yeah, creative ways effectively to work within those key parameters? And are you seeing any improvement in terms of the timelines working with through gateway two, for example, and and and the building safety regulator there? For us, we we haven't had to go through it yet. We're we're actively looking at things where we don't need to go through the gateway system. You know, we have been working, well, we do work with David Campbell from Alumna, who was one of the first to go through three. The war stories he's told me and the timelines to get through was amazing. Like, you know. I I have heard anecdotally it's getting better and a little bit quicker. I haven't heard that it's getting significantly quicker. But partly that might be because we've actually stalled and we're not sending a lot through the pipe at the moment. But from our point of view, it it's very much around looking at built stock and what can we reposition, reconfigure, refurbish. Because again, I don't I don't think we can build a building today that would hit a rental tone that we're prepared to put our brand onto. What I also wanted to ask is like part of the reason that we put the Shared Living Summit on is we wanted to bring all of the shared living sectors together. You know, I think we probably all recognise on the subject of silos that the the individual kind of subsectors work very individually, really, and we felt that there's a lot of learnings that can be made from those different sectors.

PBSA Blends Into Wider Shared Living

20:12

Where do you see PBSA as part of the wider rented shared living sector? And obviously you were in the wider UK reef arena as as as well. Is there becoming more blurred lines? Do you guys kind of have any views on you know how PBSA is defined and how might that evolve in the future? Yeah, I I totally agree that the boundaries are becoming blurred. Um, you know, this shared themes, isn't there? That everybody wants a community, they want that hospitality looked after feel, the the you know, the buzzword of well-being, everyone wants to be looked after in different ways, and that's about tailoring it to that different segment. But essentially the booking journey, how they receive information, their flexibility, or whether that's you know, a two-day stay to a one-year contract or various other you know, schemes that they all want that flexibility to meet their personal, family, or individual needs, and everyone wants a nice experience. Um, and I can't remember where I heard it, whether it's Rory Sutherland or someone saying that you know, developers when they're looking at building housing estates should look at what the added value was. And I thought, well, that's interesting. And then I saw an advert yesterday for Pi Homes uh looking, they built just slightly out of the town centre, but were chucking uh a commuting, train ticket, gym membership, and and other things as well. So now it's not just us looking at that, everybody's looking at what is the value in living in whatever community it is. So I think we're all whatever set you're you're in, or you're you're all thinking the same, but at the moment we're all very siloed because of planning or whatever regulations there are. But then also, you do need to think about an 18 year old might not want to live next to an old retirement home. Home, but there are benefits of communities. And I did actually speak to um Deanny about this, and I think one of the solutions could be villages. I live in a village, and I didn't realise how much of a village person I am and the community it is. You just mix with all the age groups, all the different types of people, and you just make it work, don't you? And when you live in a town and city, you don't get that as much. So if you start, if you think about these new areas that are getting regenerated and you know, brownfield sites, etc., and you had designated areas, you might not want to put the 18-year-olds with the grannies next door, but there is that community feel and the mixed generation. Can you imagine the learnings and the development that everybody would get, the stretch development for an older person to be around younger people, and vice versa? So I think when they're looking at these things, we need to think outside the box. So I think that you know it can work. Completely agree. We see flexibility becoming more of a thing through, I mean, it was previously just the short stay summer providers, you know, offering you an opportunity to make up for that, you know, money that you'd lost over the 43-week contracts during the summer. Now we're seeing more and more fit that in alongside the core contracts. And uh, to what extent are you looking at flexibility as a way to kind of bake that in from the start rather than thinking, right, we've got X number of beds that we're going to need to shift over the summer? How do we then push that? And is that something that you think the sector is going to have to grapple with? And by grapple, I mean work out is there a revenue loss there or is there an opportunity for upside? And where does that fit within Collegiate UK?

Flex Contracts And Try Before You Buy

23:42

Yeah, um, flexibility is number one in that affordability and the value piece for us. We we jumped on it quite quickly, um, you know, like other good operators. But in this last year, we've heavily invested in that booking journey, that front-end experience of how do you navigate a booking? We don't want people phoning us because we know that's a barrier to book. So actually being able to book a short stay with us, we you know, we're on various different platforms and Airbnb and booking.com, etc. But I think the key thing is to tailor it to the market needs. And you know, we're seeing in some markets, okay, well, there is a need for a 38-week contract because the paramedic students need a 38-week contract. Let's make sure we offer that, but instead of waiting to the summer to backfill, we just have it always on. Our flexible um booking journey is just there from day dot, and we just increase it or decrease it depending on the needs of the market, and we tailor it. And that's the that's the most important thing. And I think there's a there's this new movement of students, these commuter students that are really missing out on what it's like to live in, live in shared accommodation, and they're a you know, they're a type of customer that we're tapping into from early doors because they're not going to be waiting until the summer, but they should experience it through freshers, they should experience it in the exam season and the Halloween parties and whatever else is going on, and they can come and live with us for a few days or a few weeks. But what we're seeing a new trend this year is try before you buy, and I think that comes down to the you know, the affordability piece from a student perspective. Actually, let's go and have a look at what it's like to live here. We're seeing some people using it as a payment option and they just keep extending, and we're seeing people, you know, dip in and out, come and stay with us for weeks and then come back again. So I think you know, those operators that are going to be successful are the ones that jump onto this early on and tailor their offering to the resident. You are right, there is, you know, there is a worry around, okay, well, how can we make sure we hit the revenue targets? But that's around getting onto it early and having the availability on from the beginning and not waiting to the end to backfill. Yeah, I think I think what has I been positive, I think, about this conversation around flexibility is the acknowledgement that it shouldn't be a plan B. And we know, you know, that if you suddenly go, oh, I've got voids, what shall I do about it? It's too late, and you know, the buildings aren't set up for it, the booking systems aren't set up for it, you know, your you know, appraisals aren't set up for it, your targets aren't set up for it. So if you, you're right, if you bake it in, if it's a plan A, and it's gonna have to be because it comes down to the value piece that you've both been talking about. Why would a student want a 44-week contract if they're only there for 33 weeks? You know, and they will go to build to rent or HMO to get that if they can, you know, and I think the sector would be naive to think otherwise, really, you know, the PBSA sector, and that's you know, whilst PBSA is exempt from the renters' rights bill legislation, it's not exempt from the market impact that the rest of the market will, you know, will see. So yeah, I think that's really, really great to hear. Sean, if I can bring you in on that, to what extent are investors, do you think, mindful of that, you know, of the needs of the resident, thinking flexibly? And of course, you being vertically integrated is a big help because you understand in depth the operations. It's not, you know, it's not pure play just a third-party operator in that sense. Of course, you you have third-party stock, but what are investors asking for? What do you think the the real focus is from an investment standpoint at the moment? What are they demanding of their operator?

Investors Rethink Contracts And Yields

27:29

That's actually a really good question because I think you we've got to go backwards a little bit to answer the question. You know, stock that's been delivered up until last year has been delivered with investment cases of 51-week contracts or studios. There was stuff still been delivered for September last year, and probably some more for September this year. And that was done on an investment case done in 2021 or 2022. They are not going to be delivering 51-week contracts at whatever the rental tone that they've agreed. That is now starting to dawn on investors, and which is which which is which has got investors you know worried. Oh, I'm not going to hit the business case. If you're a PE firm, I'm not going to get my carry, whatever that may be. So they're looking to that's suddenly seeing we're seeing investors again to look much more strategically who they're going to invest with. So actually, does this party actually know what they're doing? Have they presented to me? So when we present to an investor now, we will present it with it's going to be a 42-week contract with that, and that's the the premise we're buying on. Why are we doing that? Because we've just watched the last three years and we know exactly what is going forward and and how it's going to happen. And we're seeing it change year on year. So I think investors are uh pure play investors are catching on, but they're caught on later, but they're there now, and that's becoming an interesting interface between some investors saying, Oh, should the yields could be a little bit wider because the the the the revenue's not as sticky as as we thought it was, or actually should the revenue be tighter on on the ones where we've actually got it done properly and the revenue's really sticky. So I think that's where it's been an interesting interplay, is that no one really knows the answer to the yield question. And if it's you know, if it's a studio is 51 weeks, it's it's been pushed wider right now. Do investors still want to be playing in this space? Absolutely. Do they see that PBSA in the UK is is a smart investment? Absolutely. They're just slightly more cautious on where and what they're paying. Exactly. It's not build it and they will come anymore. It's much more, much more targeted based on you know affordability, on the age of the stock, on the amenities, on that location, how's the university doing, all of that stuff, which should have, you know, should have factored in from day dot anyway. I think there's a few uh you know, a few investors who almost got lucky in those reasonably early days, or at least pre-COVID in that sense. And now it takes a much more discerning investor to really say, right, I want to be super focused on this. But I think you've obviously got that balance right, having won the COD Quadreal portfolio and and a number of others as well, of not overpitching and saying, Oh, look, we'll fill your buildings, no problem at all. You know, to be honest and open from the day, you know, from day dot. And I'm not saying any other operators aren't being honest about it, but I think the takeaway that I had from UK Reef was positive realism, which we've tried to coin a little bit at Housed, because it's it's tougher to fill, um, but for the right operator, they will do it, and they'll do it, you know, and and return that investment profile that is required by the investor. So I I was I felt like it was it was positive, difficult in terms of affordability, viability, all of that stuff that we've talked about so far. But I think for the right operator with the right product at the right price in the right location, you will do very well from an investment into PBSA, and that's how it always should have been. So yeah, I think that's a really, really good point to raise.

Authentic Marketing In The Age Of AI

30:55

I just want to recap on the marketing panel that we had at UK Reef. I was moderating that and Sean was one of the panelists. I think we've talked a lot on this podcast, and I think we've talked a lot at UK Reef about change. I think that was one of the overriding themes, really. Sean, do you just want to, anyone that wasn't live at the event, just kind of want to recap some of the themes that we discussed and in that panel discussion? Because I think it was, you know, hopefully we were trying to steer a kind of forward-thinking discussion. Yeah, absolutely. It's the biggest shift, you know, in marketing is that we're not competing on product anymore, as we were saying a minute ago. It's it's not about the bricks and mortar, it's more around, you know, everyone's got similar amenities and we use similar design language and similar pricing structures actually in each market. So the competitive advantages is more around you know, that trust and authenticity and responsiveness. So, how are we communicating to our residents or potential residents and their parents? Are we quick to respond in our digital channels? Are we emotionally connected with with these with the uh residents and their needs? And you know, the storytelling of that is becoming more and more important, you know, just touching on AI. We we talked around how important AI was, but actually, they in this generation can see through this. They're looking for authentic content, they want to hear the truth and the raw content from the residents, but there's absolutely a place for us to show the shiny brochure material. The parents are still looking for that corporate presence, and then what we need to do as operators is work with those students who are creating that raw content to show what it's like, but not in such a raw, raw way where they're left to their own devices. So, yeah, what you know, authenticity is definitely the clear trend I'm seeing. Residents increasingly are trusting the resident and generated content. Live streams are becoming really, really important, particularly for you know overseas students. We're seeing you know great conversion rates of people booking off the back of live streams. Reviews are more and more important. We're seeing you know the use of AI and search and AI search, and they're using the reviews and the authentic content to form an opinion on us to serve up to students. So so for us, that's a really important thing to and you know the real experiences and that social proof is more important than any glossy brochure anyone can produce. So it's more not it's not about that heavily corporate messaging for us. I think that sentiment was echoed in the resident panel as well. They they told the panel and the audience loud and and clear that it's they they want to know what it's really like to live there. I don't know, maybe Gen Z, Gen Alpha are a cynical bunch. They've learned not to not to trust sales messages, and it's really difficult for them to ascertain what that is when everybody's basically selling the same thing. So yeah, I think I think you're absolutely right, Sean. And as we discussed in the panel, it's difficult to monetize, it's difficult to get budget for that kind of content because it's difficult to prove ROI, but it's got to, it's got to be considered, it's got to be part of a budget line, and there's got to be resource to be able to do it.

Planning Reform And Empty Rooms Problem

34:09

Conscious of time here, what was not being talked about at UK Reef that you think should have been? Is there anything that was missed? One of the things I was thinking about was, you know, we talked around the built environment and and and how important environment is, but not about the human human sustainability. So issues like loneliness and belonging and transitioning to adulthood, digital isolation and mental well-being, I think that's something that could be expanded more on. And, you know, the operational workforce pressures on that. The teams delivering these experiences are under more pressure every year to deliver these, you know, and and get people out of their room and help them make sure they're being successful in their studies. But one of the elephants in the room that I think there could there is too is we still haven't fully reconciled the gap between the type of live living experiences people increasingly expect and the economic reality required to deliver it. And there was a lot of chat about smaller rooms or smaller housing could meet the needs, but it's not the expectation of the resident living in that. They still want it all. So, how do we balance the two? And Sean, what do you think is uh is missing from the important conversations? From the sort of the the more the investment side, there wasn't a lot. I th I thought actually it was a pretty refreshingly open event, and I'm talking out on the fringes as well. You know, this is a housing problem, you know, not just student, not just living, this is a housing problem, you know, and and I and I look around the country and sit there and go, right, we've got all these people that need housing, they're complaining about housing. But there's some student accommodation buildings that are 70% full, I've been told. That's empty rooms. They are not allowed to put non-students into the building because there's a planning issue that comes along with that. So we touched it along in bits and pieces, but no one really said it. You know, we really need to sort of dig into the um the planning rules and make sure that the built environment is used properly and used to its fullest capacity. I I think we had we had two people suggest to us you need to get some planners on here on a panel and do a question and answer session with the planners next next year. So that is definitely something we're thinking about because that underpins so much of the bureaucracy and the red tape that we see and that NIMBY mentality around students in particular. And and I think that's where there's a massive opportunity to really drive reform within planning. Because, you know, if the building safety regulator, that's not going anywhere. But what what you know what we're hearing from the government is we'll throw an extra 300 people at it, we might use a little bit of AI to deal with planning, but it needs root and branch review of how siloed the residential sectors are in particular, and how do you ensure that there's not necessarily blended living? Because to your point, Sean, I don't know how good that would be, you know, um an undergraduate living with someone from later living or whatever it might be. But I think that's a a huge opportunity, and the focus will turn to that very quickly. Um, uh, I I think, and and next year we'll we'll probably see a lot more of the planners on stage, in particular when it comes to co-living and BTR and the impact on student and then student HMOs as well. That interconnected, uh, you know, hybrid living uh uh and blended living sector is is going to be pivotal to really solving the housing crisis. So I think what you said, Sean, as well, like we we talk a lot about later living um and how there are so many empty rooms in older people's homes that they're not willing to relinquish because there's not really enough appropriate housing for them to move to. But yeah, you know, would we need to build so many homes if we didn't just repurpose the empty rooms that are already there? There are home, you know, there's the empty homes campaign, there's empty rooms in PBSA, there's empty rooms in older people's homes. A lot of of that is potentially cultural, but a lot of it is is red tape and tax and planning and and all of that. So you kind of think, actually, maybe we don't need as many new homes as the government has targeted because a lot of them already exist. You know, and then you've got you know old empty office blocks that could do with refurbishing. But again, as we said before, there's red tape involved in that. So yeah, I think there's some really we've made made a note next year. I think it's an almost a given that we'll be back at UK Reefs. So we we will definitely cover some of those. They're really good points, thank

2027 Predictions And Closing Notes

38:35

you. And last question, what do you think when we do go back next year in 2027 for the House Shared Living Summit, what do you think will have shifted by then? I think the there'll be a lot more chat around, you know, the quality of operations and you know, resident outcomes and an emotional experience. I think we're just at the beginning of this shift, you know, and maybe a little bit less on our bed numbers. Um, but I do think if the last decade was about you know professionalizing the product, I think the next decade is going to be around professionalizing the emotional and operational experience. And I think operational experience is gonna be the winning key to this. Yeah, look, I I've been doing this for a long, long time in in a lot of countries, and I've never seen the world moving as fast as it's moving right now in our space. So you know, to put a to put a put a uh a look and a view a year forward is actually quite difficult. I I agree with everything Sean said. I I I also think that the uh the way that we source our students to live in our buildings, that's moving very, very swiftly as well. And if you don't have the capacity and skills to keep up with that, that's going to catch you out in the not too distant future. There's plenty of students and they're becoming more and more discerning and more interesting in the way that they find their accommodation. You know, I I've used it before and I'll use it again. Our client's Peter Pan. Our clients always 18, and we need to we we old people need to keep up with uh what the 18-year-old is thinking about every year. So as we get older, they stay the same. So I think the technology is probably the big driver that will you know make us look at next year and go, wow, I didn't think of that last year. Um and that will be in how the buildings run, how we interact with our students, how buildings are built and how they're designed. I think that also nicely circles back to one of the first things Sean said on the podcast about kind of the sustainability of staff in buildings as well. To your Peter Pan point, Sean, like we have to encourage young talent to work in the sector because you know the otherwise you don't get that diversity of thought, that you know, di you know, dynamism, that diversity of age that's so important because something has to has to shift. Um so I think that's another thing that we can look to bring to the House Summit next year as well, is kind of more people focused content too. But also thinking thinking that through, Sarah, that the uh the when if you want to build a new building, that's a 13-year-old, not an 18-year-old. That's who you should be asking. Absolutely. Yeah, we've always said we we have tried to do a bit of data with 13, 14-year-olds. It's really difficult because they don't understand the product and the sector that we're talking about. So you have to bring it to a different level, which is difficult. We we've dabbled, but yeah, we'd you know, with the youth forum, we'd we'd love to explore more of that. So yeah, watch this space. Let's all put our heads together and work out how to get that data out of that demographic. So, with that, we're going to draw to a close because I think we could probably carry on chatting all day, and Sean and Sean are very busy people. So, thank you for being part of this podcast and also thank you for being such brilliant platinum sponsors of our 2026 House Chair Living Summit. We don't work with sponsors and partners who just want to stick a logo on things. We we expect value out of them, and you've certainly provided that and all of your support over the last few months. So thank you very, very much. We will be back with more special episodes in the next few weeks leading up to summer. So if you or your organisation has a duties and topic for us to get stuck into, please get in contact. And if you just love listening, please follow or subscribe so you get the latest episodes straight to your channel of choice.