Australian pension fund Aware Super’s deal to buy Qatari Diar’s 22% stake in Get Living brings the BTR developer fresh ambitions for growth, says chief executive Rick de Blaby.
The Qatari sovereign wealth fund was one of Get Living’s founding investors, along with APG, a Dutch pension fund, and Delancey-backed Door, both of which own 39% stakes.
De Blaby (pictured) told EG about how the deal was struck, what changes now and the company’s pipeline for new schemes.
EG: What does Aware Super acquiring Qatari Diar’s stake in Get Living mean for your future strategy?
De Blaby: On one level, not much changes, because you just have Aware Super coming in and taking the seat at the table that Qatari Diar always had. I don’t think it changes our outlook, our conviction about the sector, our strategy or anything else like that.
But inevitably when you have a new shareholder, they come in with fresh ideas and new energy, and it would be surprising if, with the investment they have made, they didn’t have the ambition to make sure that Get Living really did grow. And given that we’ve got to the size that we have, we are well positioned to make another step change in the scale we’ve got.
We now have 4,000 operational homes in East Village [in Stratford], Elephant Central [in London’s Elephant and Castle] and New Maker Yards [in Salford]. We open and launch Lewisham in the fourth quarter of this year, and we are on-site at Birmingham, Leatherhead and Maidenhead right now. That takes us to more than 10,000 homes, and I don’t think that I, our team or our investors want to stop there.
EG: What was Get Living’s role, if any, in choosing Aware Super as its new shareholder?
De Blaby: Lazard ran the process for Qatari Diar. It was their sale and it was their deal. As chief executive and as the management team, we are in service to all the shareholders, whoever they may be.
We come to work every day to run our best game to make that happen. We as a management team had to do a lot of presentations to prospective buyers, and, obviously, as a prospective buyer you would be interested in knowing not just the assets but also who is running them… Of the people we spoke to, Aware Super was significantly the best, most compatible partner for the other investors and for us.
EG: Have you spoken to Aware Super about any new avenues of living factors that they want to explore with Get Living?
De Blaby: We have a series of meetings scheduled with them in the coming months, so we will explore all of that. It needs the support and alignment of all the investors, which is inevitably there, but you go into a different phase once you put the ink on the paper.
EG: What are your plans for your £200m Glasgow scheme that has reportedly been put “on hold”?
De Blaby: We have strong convictions around Glasgow – it’s a fantastic city and it has a shortage of good-quality rental housing. There are several people trying to promote their schemes there. The rent control environment they have introduced there makes it harder, but we will just have to work through that.
If you have a choice of putting £200m in a location that has rent control and £200m into a location that hasn’t, I am afraid you are going to pick the one that hasn’t. The scheme is still a consideration.
EG: How can Get Living, or the BTR sector as a whole, help to solve the housing crisis?
De Blaby: We have a desperate shortage of housing in the UK, and I think that Get Living and the BTR sector can provide the solution to a lot of that.
We are hearing from political parties of all persuasions that they want the UK economy to grow. If we are going to rely on high-growth companies to create high growth and higher-paid jobs, the talent that is really going to deliver that is mostly the millennial and Gen Z demographics, and they need somewhere to live. They want to live in urban town centres, and therefore they need high-quality housing. We think there is a strong correlation between high-growth economies and high-quality rental housing. And we want to be part of that solution.
But that’s not to say there are not some headwinds in terms of how you grow, as the regulation is getting higher, the cost of debt has gone up and everyone is embarking on a price discovery right now on where yields will move.
The Aware Super deal will bring some confidence in the sector that there is a big, global, long-term investor out there that is willing to take a pretty significant stake in us and in the sector. I am confident that we will be able to grow, but we have to be really disciplined and judicious about how we make those future acquisitions going forward.
EG: With the Get Living East Village masterplan due to be completed soon, what are you looking for in your future pipeline?
De Blaby: We have always gone for larger scale, and if you are going to build larger scale, part of the proposition you have to offer residents is the benefits that accrue from that scale. When we are competing to buy assets or for forward funding, we can generally write a big cheque. And we are not generally reliant on debt to support it. We embrace complexity and mixed-use – that is partly how we draw a return.
The forward funding model works well for us. These regeneration schemes take years and years to prepare, and the partners that we have, like Hub, Muse and Watkin Jones, are good developers, and they are very good at nurturing and procuring these things. If we can provide the capital that helps them realise what they have been working on for years, these are generally good partnerships and are win-wins.
I think the nature of the opportunities that come to us might be slightly different from those in the past. We will be seeing existing stock come into the market as the sector has matured a little, and we might be able to buy stock that is already under construction. There might be opportunities to convert existing buildings.
We are open-minded about how we get the product that we are after. You do have to be agnostic about the manner or the style in which it comes to you.
EG: What kind of schemes are you actively looking for in the market?
De Blaby: We look at anything in Birmingham and Manchester because we have footprints in both cities and adding more assets gives you operational synergy and efficiency. We are looking for schemes that fit our model, that have more than 400 homes and links to good public transport and the public realm, and are of a scale that we can put a team on-site. We have plenty of firepower from the investors that we have.
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