David Woodward is a globally recognised leader in the Build to Rent (BTR) / multifamily sector, with decades of experience operating large-scale residential portfolios. As CEO of CompassRock, he oversees an investment platform with a portfolio of BTR properties, providing investment management, asset management and property management services. As CEO of GAA , he oversees a team that provides strategic and operational advice to investors, developers and operators worldwide. His expertise is grounded in real-world execution, from development to lease-up to stabilisation and long-term asset performance.

What are the biggest operating mistakes you see new entrants to the BTR sector make — and how can they be avoided?

David:  When it comes to operations, one of the biggest mistakes the industry tends to make is to assume that operations can be figured out later, when the properties are delivered to the market. Many in the industry underestimate how difficult it is to operate residential assets and drive top level financial performance. It’s not unusual for investors to want to start their own operating company (aka ‘op co’) or to just leave operations to a local property management company that may not have a lot of experience with the dynamic nature of BTR operations. So, the advice is to take ‘ops’ seriously and give a significant amount of thought and planning, well in advance of the properties being delivered to the market.

How do you define operational excellence in the Living Sector, and what KPIs really matter to investors?

David:  Operational excellence can be defined as when the asset is generating the best financial and customer performance that is possible, given the property and the market. There are many important KPIs when it comes to residential operations. It’s easy to focus on the obvious stats, like occupancy. However, if you drill down a bit deeper into operations, other important stats can provide insights into how well an asset is being operated, such as the resident ‘churn’ rate, rent growth both for new and renewal tenants, the number of days it takes to get a unit re-rented, and expenses on a gross-to-net, per unit and per square foot basis.

What lessons from the US and UK multifamily markets do you think Australia should — and shouldn’t — adopt?

David:  The US remains a strong reference point for residential investment and operations, and over the past decade the UK has become a good reference point too. As such, there have been many ‘lessons learned’ over the past few decades. Some of these lessons that should translate well to the Australian market include creating well thought out apartment floorplans and amenities without ‘over spec’ing’ the properties. One of the positive things from a rental housing perspective is that the units can be designed to be more efficient than for-sale product, as long as they are well designed. In addition, the amenities on offer can be nicely designed and appointed, without ‘over doing it’. This is one of the lessons that the UK is now coming to understand, that there is a lot of demand for well designed apartments, with good, but light, amenities, and great service. Sometimes the industry tends to ‘over-think’ things.

How should operators think about tech integration and resident experience in today’s market?

David:  Leveraging technology is important to ensure that our industry is always moving forward. However, some in the industry get very ‘geeked up’ about tech when what is more important is delivering nice apartments at an affordable level, with great service. This is far more important than the latest app! Having said that, there is a lot of room for tech in our industry, from building tech to how we interact with residents. AI will also play an important role in our industry as there are so many ‘connection points’ that have the potential for failure. I see AI as an opportunity to close many of these weaknesses in the system.

You’ve advised operators across many regions — what distinguishes the most successful BTR platforms you’ve seen?

David:  What’s interesting to me is that our industry is not that different everywhere GAA works around the world. The undersupply of quality rental housing is common almost everywhere around the world. How to best approach this issue varies from region to region, but the needed product and service are, again, fairly similar. What distinguishes the best operators is the quality of the team. Although tech and AI will continue to improve efficiencies, it’s still a fairly people intensive business. Therefore, the quality of the recruiting, training and service to the customers is what really differentiates the best operators. In the work that GAA does globally, there is still a lot of room for improvement in virtually every market.

David is a lead speaker at the 2nd Annual Living Sectors Summit and will be sharing his thoughts in more detail on ‘Value creation through operational excellence in Living Sectors’

View the brochure for details on his session and the full two-day agenda.