Nuveen on why operating models must and will change

Nuveen Real Estate’s head of European housing Andrew Friend says covid-19 has prompted a re-think in that region.

Andrew Friend, Nuveen Real Estate

The beginning of the covid-19 crisis created immediate and urgent operational focus for housing providers. Centered solely around the safety and wellbeing of residents, this focus included such measures as additional hygiene, food drops, PPE equipment, broadband provision and mental health support. In the student, co-living and retirement living sub-sectors it has been important to provide activities such as online yoga and quizzes among other activities to encourage a sense of community and ensure residents’ wellbeing.

As time has moved on, the sector has had the ability to reflect on what the ‘new normal’ may mean for operating models. Notably, the pandemic has ‘fast forwarded’ the need for the incorporation of more technology into the sector.

Those managers that already had a strong technology strategy in place were able to disseminate regular up-to-date information and support to their customers. Those with the ability to provide virtual tours, or track/respond to leads online, have been able to proceed closer to business as normal and indeed steal the march from those with more traditional platforms.

As demand grows and tenants become accustomed to this ‘alternative’ service, we are likely to see an improvement in the quality and depth of technology’s role in the sector, and a consolidation of a few winning operational platforms.

While consumer demands change and evolve, it is essential that design stays relevant. The rental market, and those more maturing sub-sectors such as student accommodation, micro-living and co-living will need to address the space versus amenity conundrum.
With the prospect of more people working from home, there is likely to be a greater focus on alternative working space, and even meeting rooms, rather than expensive, over-specified gyms, swimming pools, indoor cinemas or basketball courts. We anticipate the increased sense of community and wellbeing witnessed in this crisis is something tenants will both value and expect going forward.

Keeping it professional

Throughout the crisis there have been examples in the news of tenants suffering with the added uncertainty that can come from private landlords. This has been particularly pertinent in respect to responding quickly and communicating efficiently – whether it is regarding genuine short-term hardship in meeting rental payments or the resolution of emergency building maintenance.

We believe recent experiences will lead to increased demand for a more professional model, with consumers demanding an even higher standard of service and relationship for their loyalty. The industry will be judged by how it acted in the crisis and those managers that put tenants first will shine.

Andrew Friend is Nuveen Real Estate’s head of European housing. He took up the role in 2019 and has more than 30 years of experience in real estate. He is responsible for developing and executing Nuveen’s strategies across Europe for housing in all its forms.