Launching a platform to “rival Airbnb” was always going to be a big bet. When JLL and Lavanda unveiled JLL Short Stays last month, they did it with gusto.
The short-term urban rental platform will launch with 1,000 locations across the UK, operated by institutional residential clients and partners including Greystar, Blackstone and CA Ventures. The founders of the platform see scope to expand it to more than 35,000 locations across the globe, with a broader roll-out beyond the UK expected next year. And they want their future customers to know that there is a better offering than the status quo.
“Don’t accept the residential market as it is,” said Lavanda chief executive Frederik Lerche-Lerchenborg, discussing the business’s plans with EG’s Tech Talk Radio alongside JLL director Sam Winnard. “Ask for better. Ask for more. Demand flexibility.”
Lerche-Lerchenborg and Winnard said Short Stays will offer professionally managed, fully flexible spaces for people who need a base for more than a few days but do not want to be tied into a long contract. Traditionally described as the corporate relocation sector, this is the gap in the market that Short Stays will focus on. Between JLL and Lavanda, the new venture has the technology, the firepower and the stock.
From empty space to opportunity
“We realised there is a huge amount of demand for medium-term, quality inventory,” said Lerche-Lerchenborg. “People are relocating. People are in between long-term tenancies and the relationship with the office is changing. People are increasingly looking to book three-month or six-month stays, especially around the UK. But finding that high quality inventory is very difficult.
“We have a whole load of different partners including JLL clients but also other big asset managers like Greystar and Blackstone, which means we have a lot of inventory.”
Winnard said the demand is clear: “Ultimately, we are seeing a closing in of short- and long let markets. They aren’t as polarised as they once were.”
He added: “One of the benefits of the inventory that we’re providing is that all of it is professionally managed because the source of the inventory is build-to-rent schemes. With that comes the professional management but also the community support and, typically, the site staff. That’s where there is a real USP. People can book confidently knowing that those properties are going to be managed well when they arrive on the day and that’s a big difference. You don’t necessarily always know that when you’re booking somewhere, so that that element of confidence is really important.”
On the supply side, providing short- to medium-term rentals has historically proven tricky, added Lerche-Lerchenborg. “You can’t just create a hotel overnight,” he said. “But in a way you can do something similar with this product. You can match that supply with the pre-existing demand which means returns for the buildings will be higher and creates a more sustainable market by optimising real estate. Everyone hates the thought of these new shiny towers being empty – whether it’s for a day, a week, a month. That’s such an incredible waste.”
Perfect moment
The duo insist that the Short Stays platform will offer something Airbnb doesn’t, by ensuring every let will be professionally managed. But there will be elements of the Airbnb platform that will be crucial to the ultimate success of Short Stays.
“Logging on and booking via an app like the Airbnb experience is what people want,” said Lerche-Lerchenborg. “It is the perfect moment in time for this as the real estate market is maturing and we can deliver this technology to create a platform people want.”
Winnard added that much of Short Stays’ strength as a platform stems from the fact that it is not just a reactive idea. It has, like so many innovations, been expedited by the coronavirus pandemic, but is not a knee-jerk reaction to it. “It feels like this was a natural progression for us,” he said. “This is something we were already experienced in, dealing with short stays from a build-to-rent point of view. That has been a huge catalyst for innovation. So, we feel more like we have taken a stepping stone approach rather than a leap.”
As for future plans, it is clear the ambitions for Short Stays are sizeable. “We have a lot of news coming over the next few months in other geographies,” said Lerche-Lerchenborg. “It is all about building on the core of flexible rentals, and I think in two or three years this will become an asset class in its own right.”
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