Unlocking the potential of BTR


In 2020 Rishi Passi and business partner Anthony James founded specialist Build to Rent development company Oblix Living. As CEO, Rishi is in charge of corporate development, finance, and the overall day to day management of the business. Rishi is a seasoned global real estate entrepreneur, with over 20 years’ experience in development, investment and finance. During this time, he has overseen the improvement and construction of numerous residential developments throughout the UK, Europe, Asia and the USA.

Unlocking the potential of BTR

At Oblix Living, we focus on creating Build-to-Rent (BTR) assets that cater to the evolving needs of the modern urban dweller. From inception we target urban locations with thriving economic ecosystems, usually with a growing young population, strong inward investment, increasing employment opportunities and proximity to efficient transport networks. The presence of established universities with high student retention rates is a definite advantage.

Our developments typically comprise from 90 to 200 units positioning us between the institutionally focused forward-funded market, which usually targets developments of 200 units or more, and the smaller private rented sector market, where projects are often limited to 80 units or less. Our recently completed 95 apartment scheme at Iron Yard in Sheffield city centre is now 100% let and our conversion of Saxon house in central Leicester, comprising 100, 1 and 2 bedroom apartments with a gym, workspace and residents lounge and garden is well underway.

Oblix Living developments are characterised by a variety of amenities and facilities that enhance the residents’ living experience. We usually include a concierge service, a well-equipped gym, communal workspaces, resident lounges, green spaces, and high-speed internet connectivity. Our homes are strongly technology-enabled. This focus is integrated into the design and functionality of the properties, catering to the preferences of the tech-savvy younger demographic we appeal to. The result is a living space packed with smart features that make everyday life more enjoyable and convenient.

The value in conversions
Although the Sheffield Iron Yard and Leicester Saxons schemes are both conversions, Oblix are also keen to explore ground-up schemes too as these can often have advantages over the repurposing of existing buildings. However, in the current property cycle, several factors contribute to the appeal of building conversions:

  • High Construction Costs and Financing: The challenges of the post-pandemic era, Brexit, and geopolitical events we are currently witnessing have led to increased construction costs. Additionally, higher borrowing costs have created downward pressure on land values. This has made conversions an affordable and attractive option.
  • Environmental Considerations: Converting existing offices into new homes promotes sustainability and minimises environmental impact.
  • Opportunities are plentiful: The increase in flexible working arrangements, particularly after the pandemic, has led to an abundance of redundant office spaces coming onto the market. These can present great opportunities for investors through change of use.
  • Delivery and Demand: Conversions can offer a quicker route to market compared to traditional new builds. This allows developers and investors to tap into the strong demand for quality rental properties which currently exists in the UK.

And the challenges…

  • Increasing Regulation: Regulations governing minimum space standards, energy efficiency, fire safety, and the provision of natural light in habitable rooms impact conversions. Developers need to adapt to these evolving standards.
  • Planning hurdles: Securing approvals from local authorities, especially when change-of-use permissions, building codes, and environmental considerations are involved, can be complex. Listed buildings or properties in conservation areas may present additional regulatory hurdles.
  • Structural Modifications: Transforming an office building into residential units often requires structural alterations. These may include adding windows, modifying floor heights, enhancing soundproofing, and improving gross-to-net efficiency. Overcoming these structural challenges is essential for project viability.

The outlook for BTR
I believe BTR will continue to grow. The obvious challenges are going to be the interest rate environment that we are in and where rents and pricing settle. Rents have continued to increase in most locations where there is a strong imbalance in supply and demand. We believe this is going to continue, as more and more young professionals see the benefits of flexible well serviced rental buildings at a time where demand continues to be slow in new home sales due to the high the cost of mortgages.

BTR will get through the challenges we have in the short term and continue to show the growth it has been achieving over the past few years. By embracing conversions and adapting to evolving regulations and market dynamics, we have positioned Oblix as a forward-thinking leader in the BTR space, offering a modern and convenient lifestyle experience for the people who will make our projects their homes.