Developer Southern Grove has revealed it will expand into the Build to Rent (BTR) and co-living sectors after eyeing significant opportunities.
With huge promises in these sectors, which we recently explored, the developer has launched Mast, it’s new high-end BTR arm, and Evolution, a premium co-living division.
Southern Grove – widely known for its residential projects and a series of large student accommodation schemes delivered through its Future Generation brand – is already building a pipeline of projects to expand its focus across these high-growth areas.
Evolution will aim to be a market leader in the co-living space, offering accommodation with high-end finishes and a focus on health and wellbeing. Its schemes will feature a mixture of amenities that will vary by location but is likely to include gyms, bars, private dining and cinema rooms.
Workspaces are typically incorporated too, making these developments ideal for a post-pandemic society that will increasingly be working from home.
Its BTR brand Mast will also replicate the high-end approach to design and build quality that Southern Grove takes across its developments.
Both sectors serve a generation of tenants who are renting for longer, and both Evolution and Mast represent natural extensions to the company’s work in the purpose-built student accommodation (PBSA) sector. Future Generation has delivered 550 beds to date, with a further 1,600 completing next summer.
The move comes as the British Property Federation predicts that the UK’s BTR sector could be valued at £75 billion by 2025, while the co-living sector is still at a relatively early stage.
A number of sites have already been identified around the UK that will deliver around 1,000 units under each of the two new division for 2021 and 2022, with further announcements to follow in the New Year.
Chairman Andrew Southern says the demand for new housing has never been higher. Despite the Help to Buy scheme and the stamp duty holiday, many first-time buyers still face extreme hardship trying to raise a deposit for a property purchase and many will turn to co-living and BTR for a solution.
He adds: “This is an extremely exciting moment for me personally and the company. Entering the Build to Rent and co-living sectors means Southern Grove will have a presence across all the main residential property classes, and a new focus on two of the fastest growing products in the market.”
“These two sectors are widely expected to outperform other asset classes over the next few years, and we are determined to replicate the success we have enjoyed in the student accommodation sector, where we have supplied a disruptive high-end product and a value proposition that ensures our revenue is protected across economic cycles.”
“Build to Rent has proved an attractive way of investing in the UK in recent years and demand continues to grow as attitudes change. It’s no longer always the case that those who rent have no other choice. For many, it is a lifestyle decision or a choice based on life and family planning.”
“Co-Living, too, is increasing in popularity. While it is a model that has been around for a while in the student accommodation sector, where we are strong, it is only more recently that it has started to enter the mainstream. Co-Living provides a higher level of comfort and greater social interaction at relatively low cost. It will also make it easier for those residents who aspire to own their own home to save up for a deposit.”