Large-scale PRS Overcoming the Current Industry Hurdles (April 2017) Discussion Paper
The IPF briefing paper, Mind the viability gap: Achieving more large-scale, build-to-rent housing, published in 2015, focused on addressing the viability hurdle in order to provide an accelerated path to achieving large-scale, build-to-rent housing.
The purpose of this discussion paper is to focus on the hurdles relating to liquidity/transparency, pricing and management expertise that impede residential holdings from being integrated into mainstream (i.e. largely commercial property) investors’ property portfolios. These hurdles, and what is being done (and proposals as to what should be done) to overcome them, are reviewed under the following section headers:
• Hurdle 1: Valuation methodologies applied to large-scale, private-rented residential (PRS);
• Hurdle 2: Requirement for a widely adopted Index; and
• Hurdle 3: Developing professional management capabilities.
The IPF organised a panel discussion in London on 12 October 2016 to discuss current initiatives to overcome these hurdles. The event and subsequent work informed the final version of this paper, which we hope will generate further discussion within the industry, resulting in these and other hurdles being removed.