How Indi will curate a different rental experience
Contents
How Indi will curate a different rental experience
Choose Indi for independence
What is build to rent?
Renting revolutionised
Exceptional and effortless
Human experience through high-tech
Introduction
Housing affordability has been permanently in the headlines since the Covid-19 pandemic hit.
According to Domain, it now takes the average first home buyer couple more than four years to save for a deposit in Brisbane, for example, nearly five in Hobart, six in Melbourne and Canberra, and a massive seven years in Sydney.
House prices in Australia’s five biggest cities have risen by nearly 25% in just one year, CoreLogic data confirms.
Behind these statistics sits a structure that is very hard to shift. Big, bold ideas are needed.
Investa’s Indi is one of those big, bold ideas.
Indi – a name that echoes independence, freedom and belonging – promises to deliver “rental experiences differently,” with high quality homes and shared spaces that are purpose built for rental and which offer the peace of mind that comes with lease flexibility and security of tenure. Alongside a proactive maintenance program, pet-friendly policies and sustainable design and operations, Indi will offer a new standard in rental accommodation.
Michael Hogg, General Manager of Indi, is charged with bringing the vision to life and is committed to delivering on the promise of creating a customer-driven rental experience that “turns everything people expect about renting on its head”.
“We want to encourage our future residents to come to us and tell us what they want – whether that’s a specific length of tenure or the size of the space – and we will curate a living experience.”
Michael Hogg, General Manager – Build to Rent, Investa
Hogg joined Investa in 2021 to oversee operations and property management functions for Indi, which is targeting a portfolio of 5,000-plus apartments. Indi already has more than 1,300 apartments underway at Pitt Street in Sydney’s CBD and in the inner-Melbourne suburbs of Footscray and Southbank.
Another Indi project, at 132 Kavanagh Street in Melbourne’s Southbank, was announced in December 2021, and will incorporate 434 apartments. Mr Hogg has a strong track record of building real estate businesses. He most recently held a senior role with co-living operator Hmlet in Singapore. Prior to that, he established and operated a successful real estate technology business in Asia.
“The phrases ‘build to rent’ and ‘multi-family’ mean nothing to people outside the real estate sector. What Indi is doing is curating a holistic, completely customer oriented rental solution for individuals,” he says.
“A combination of everything from lifestyle and family structure down to furniture choices make each person’s situation unique. We want to encourage our future residents to come to us and tell us what they want – whether that’s a specific length of tenure or the size of the space – and we will curate a living experience.”
Build to rent, or BTR for short, is purpose-built residential accommodation that is held for long-term rental, rather than sold to individual owners. This attracts institutional investors, like pension and superannuation funds, looking for steady returns.
While new to Australia, the asset class is well-established in the United States, Europe and the United Kingdom, where it is sometimes called multi-family housing. In the UK, this growing asset class represents 2% of existing housing stock, while in the US it accounts for a massive 12%.
There are currently around 15,360 BTR apartments in Australia at various stages of completion, says EY. But 5% of Australia’s rental stock could be BTR within a decade – with around 175,000 apartments available for long-term rent.
Unlike traditional build to sell residential, BTR does not require pre-sales to ensure viability. This reduces development timeframes, creates jobs – EY thinks more than 17,600 new jobs are ahead – and ultimately more homes where Australians want to live.
BTR presents a lot of advantages for tenants, as each development is designed specifically with renting in mind. Think concierge and dry-cleaning services, parcel delivery and pet washes, as well as the assurance of long leases.
Renting is a conscious choice for many people who don’t want the burden of property ownership and are looking for the freedom to live where they want and move when they choose.
Around a third of all Australians rent, and the home ownership rate of younger Australians is decreasing as more people question the ‘norm’ of home ownership. Academic research has found many Millennials choose to rent because location and lifestyle are of “paramount importance” to them.
Other recent research from the University of Technology Sydney has found around a third of people who rent for more than 10 years are positive about their choices. Their main reasons? Renting is more affordable, there are “fewer worries and liabilities,” and renting is more flexible. “I wouldn’t want to buy even if I had the money,” one respondent to UTS’ research said.
The online world has changed people’s expectations, too. If customers can shop from anywhere, anytime, and can expect a fast and frictionless experience online, why wouldn’t they expect the same experience when renting?
“Consumers can usually expect a fair amount of certainty and control when they make a purchase,” Hogg notes. “But it is the opposite when renting – from search and select to moving in and moving out, people are treated like second-class citizens.”
A new generation doesn’t expect to be treated like second-class citizens – and they won’t tolerate a second-class experience.
Exceptional and effortless
If people now expect an exceptional customer experience, how can we think differently about renting?
Amenities are appreciated. In the UK, where 63,950 BTR apartments are complete and another 140,000-plus are under construction or in planning, BTR is recognised as an “unparalleled renting experience”. While each BTR development is different, British Property Federation analysis finds a few consistent features: 78% have a shared garden or roof terrace; 73% offer a dedicated concierge; 73% offer a calendar of events; 61% boast coworking spaces and resident lounges; and 53% have gyms or wellbeing centres.
But Hogg emphasises the importance of customer experience over amenity. He talks about Ipsos’ “six forces of customer experience”: fair treatment; control; status; enjoyment; belonging and certainty. “The aim is to create more human-centred businesses – something that is currently missing from the rental experience,” he says.
“As we step through the stages of the rental process, few of the forces of customer experience are embedded into the system. This is why it has to change. We know, from speaking to many customers, that they want certainty, control and fair treatment when they are shopping around for an apartment and when they make a choice.
“When living in the property, people want to enjoy their home and feel like they belong – that is overwhelmingly what our customers are telling us. But they don’t get to enjoy the property because they are always worried about the future. They don’t have certainty.
“And then when they move out, 70% of customers say that control is the major issue. They want transparency in the process, so they know where they stand on their security bond, for example.”
“Effortless” is a word Hogg uses frequently. “If we make the process effortless, it takes the stress out of renting and creates a greater sense of belonging. We want people to feel welcome and to stay as long as they like because they belong in the community and the customer experience is exceptional.”
“If we make the process effortless, it takes the stress out of renting and creates a greater sense of belonging.”
Michael Hogg, General Manager – Build to Rent, Investa
Human experience through high-tech
Technology plays a central role in this effortless customer experience, Hogg adds.
“It is very hard to offer great customer service, community engagement programs and outstanding facilities management without a tech-enabled platform.
“A resident app is not just a trinket but a really useful tool when renting – it’s the key to the front door of your property and the common areas, the channel to pay rent, review the tenancy ledger, lodge a repair request, and check out what’s happening in your community.”
Large-scale research in 2020 from the National Multifamily Housing Council in the United States – which surveyed 372,000 apartment residents – found 100% of respondents would prefer to engage with a mobile app over a website.
“Thirty per cent of UK tenancy transactions are now online,” Hogg observes. “The Millennial cohort want to interact online. It’s a strong trend – one we think will grow and grow.”
- 90% individual apartment selection
- 87% resident feedback, ratings and reviews
- 87% maps of unit locations
- 81% videos of apartment models and amenities
- 80% appointment reminders and bookings.
Indi is new to the market, but Investa is determined to “double down” on the customer experience. “Our point of difference will be the experience of living with us,” Hogg says.
Many other institutional investors are also looking to enter the BTR space, but Hogg says Investa’s competition is the existing rental market. “Residents will recognise that, finally, ‘it’s about me’.”
