In keeping with their commitment to delivering the property industry with the latest insights and innovations, The Urban Developer recently hosted its inaugural Residential Apartment Development vSummit.
A valuable mix of speakers provided their take on their respective market sectors, including Engine Property Group’s Managing Director, Andy Dawson.
Andy voiced his disappointment with the strata industry’s current approach to pricing and how he perceives that will affect his sector’s ability to deliver on promises when it comes to both a developer's vision and indeed the realization of resident’s expectations.
With the latter carrying significant weight for a developer's ongoing reputation and legacy, we have asked Andy to share some more of his views, which you can read below.
Evolve
At a macro level, and as a result of the pandemic, our industry has experienced a "fall off" in development supply within the marketplace. The result being that organisations are now vying for business in a relatively constricted market.
What I'm seeing, disappointingly, is a "race to the bottom" on pricing. Businesses choosing to participate in this create the eventuality of dealing with income pressure, increasing costs, and weakening balance sheets. This all leads towards the inability of these businesses to invest in their structure, people, and processes. These are concerning indicators to me. As an industry, it's just not the direction we want to go.
Whilst, pleasingly, we are seeing increased development activity, sites of size and complexity require businesses to demonstrate investment and evolution, contrary to "price takers". This is due to sophisticated thinking around managing sizeable assets and what a business should bring to the table.
I firmly believe that OC management holds a great deal of responsibility in delivering on a developer's promise. This can then foster community, create building efficiencies, deliver on sustainability, and ensure a building is future-proofed by investing in new technologies that influence the entire residential living experience.
How can you possibly achieve all that when you are a business that is pricing backwards?
People, Processes and Structure
We are in a "people business". If I were a developer, I would be asking who the people behind the business are, who will be looking after the development, and what is their understanding of culture? These are the people entrusted with managing a new development or an existing building; how do their values filter down to the experience of people living in the building.
With culture defined as the repetitive practice of positive behaviours – people and processes are the investment. Gauging commitment and passion is vital to creating a humanised and personalised experience, and you won't get that if a business has a disinterested or unengaged team.
What does the structure look like? Does the business comprise a sole manager, a manager with modest administration support, or an entire team structure with departmental support, such as a dedicated finance team? Structure again points to investment.
Brand
If a building's lifespan is 50-100 years, how can you ensure that the needs of that building over the long term are being considered?
Establishing how a business invests back into its service proposition gives you an indication of how the building will be future-proofed. Exceptional businesses are continually improving.
What does their brand tell you about them? A brand is a promise and sets up an expectation - it indicates the service and experience you can expect and their thinking and relevance. If a firm looks old-fashioned and stale, they probably are.
Community & Sustainability
We play an enormous role in the building and fostering of community. Activating spaces and amenities helps to ensure that residents are getting maximum value and usage. Ultimately, as it all is meant to be. For this reason, it’s important to ask what technology the business brings to the table to achieve this activation?
It’s becoming increasingly important to be able to assess, demonstrate, and apply realistic, achievable ways for our buildings to reduce their environmental impact. What is the business's approach to sustainability and the real ability to assist owners corporations to tread lightly? In my view, this extends to investing in dedicated personnel, not just the provision of a policy.
