robet Nick - HUB Living ===

Nick: [00:00:00] Hi, and welcome to the latest edition of the Concilio Better Places podcast. I'm actually delighted that we've been joined today by Robert Sloss, the CEO of Hub Living. Robert, thank you for joining us. Pleasure to be here. Just, um, a thought useful just to kind of catch people up on your career in the development industry.

So, so how do you start post uni on for development career path?

Robert: Okay. Um. I got a job probably more by luck than anything, right in the depths of the 19, early 1990s, uh, recession. Mm-hmm. Somehow Knight Frank and Rutley as they were then took me on and I started work in the city of London. Mm-hmm. And, uh, it was an office market that was deeply depressed.

Nothing was really going on. Mm-hmm. Um, but it taught me how hard, uh, things can be, um, when it's difficult. And I think it's a really valuable lesson to learn. At a time like that and learn, you know, prepare, sort of prepare for the worst and hope for the best. Um, and I think that's often the right mantra for development.

Mm-hmm. So I started there, did an [00:01:00] MBA switched over to becoming a principal, worked in private equity for a while, but I always had, I. Eye to doing my own thing. I always, mm-hmm. It was kind of inbuilt in me to create my own entity. Uh, started off with a transaction, uh, that was in R Lake in Heath, that was a 640 house.

Um, housing state led to the US Air Force. Yeah. And we bought that and, uh, it was successful. And, and that was the advent of Square Stone, which was our first vehicle. Mm-hmm. SquareOne did a variety of different things in the office and residential sectors pretty successfully. And the most successful thing SquareOne actually did is it gave birth a hub.

Right. And came up with the idea post GFC, that uh, there was a big housing shortage in mm-hmm. What I would, uh, loosely call the mid-market. Uh, funds were going into prime, super prime residential in London, but I could see there were massive waiting lists in mid-market. Mm-hmm. You also had the advent [00:02:00] of the Elizabeth line that was coming along, and so we had the simple premise that we should try to, uh, acquire sites along the Elizabeth line and cater for, uh, this undersupplied market and also.

We could see that multifamily BTR was going to come to the UK and we wanted to be one of the first movers in that.

Nick: Mm-hmm.

Robert: So

Nick: BTR build to rent. Yes. Um, some of our audience won't be fully aware of what build to rent. Is Okay. Um, so you were one of the first in the UK to set it up? Yeah. When you first set it up, I mean, this was over 10 years ago now.

Correct. What was the general knowledge of Build Tore BTR and we'll call it BTR from from now on?

Robert: Um, I would say virtually non-existent. Mm-hmm. If I look at our first scheme, which was rehearsal rooms in North Acton, essentially that was a for sale residential scheme. Mm-hmm. That we decided we would, um.

Use this rental and try to fund with a, a big financial [00:03:00] partner. Uh, it turned out to be, um, UK's, uh, m and g that did that deal, which was just about the first institutional funding deal in the sector and. The product was, we, we had some shared immunity, but no, no one really knew how the immunity might get used.

There were a bunch of flats that just happened to be in a building. Um, and so, uh, I would say our products now are very different from that. Mm-hmm. Uh, we are probably generation three or generation four, BCR in the uk. Right. Um, we've developed right the way through that cycle, and I think in a way. Now we've come back to the beginning again, which is a simpler BTR product.

Mm-hmm. That perhaps has less amenity, um, and more focus on, on, on purely apartments. So we've gone through that full cycle. The, um, the, the benefits of BTR in terms of what it offers people is a high quality, well [00:04:00] maintained, uh, apartment in a professionally run building and. Clearly in the UK for years and years and years, there's been bad names about rented residential accommodation.

I think BTR, if it's done well mm-hmm. Sets apart from just ordinary rented residential accommodation. And that's why I think

Nick: it's

Robert: important.

Nick: An awful lot of accidental landlords, um, I think came post financial crisis, didn't it? And that, that is the general myth of the rental market. Yeah. But your product is obviously very different to the accidental landlord, um, renting rooms out.

Yeah. So institutional investment, I assume would've seen. In America, the potential returns, um, from the build to rent market, or I think it was far more established before it came to the uk. Yeah. Did you find institutional investors were, were welcome on day one, if you like. They saw the opportunities here and that made it easier to, to get funding than you might have perhaps thought possible?

Robert: Uh, I, I think that. Perhaps the UK is always quite slow to pick up, uh, changes in, in real estate sectors and, um, [00:05:00] multi-family BTR was no exception to that. I think there was a lot of cynicism at the time. Would it work in the uk? Would people pay, uh, premium rents to ordinary, uh, rented uh, accommodation. So it was slow to start at the time as well.

So between, uh, 2012 and 2018. You had a very strong sales market, so a lot of developers were like, why do I need to rent this when I can just sell the apartments? And that held the sector back for a long time. The other thing that held the sector back was there was no data, there was no rental data. And so there was, there was nothing for people to hang the hat on and say, okay, those are the rents and that building that's comparable and therefore I can mirror that.

And that was another reason why it was slow to develop. But over time. The, the trickle became a flow and then the flow became a flood. And as more transactions happen, more institutions, um, more, uh, pension funds mm-hmm. Um, became confident, uh, in the sector and invested.

Nick: Okay. So you produced a report recently, um, build to [00:06:00] Rent a Capitalist for Urban Renewal.

Yeah. Um, as part of a journey of build to Rent. Have council seen that by having built to rent in early and bringing people in? Early, rather than relying on developers to sell off one flat at a time, you can actually kinda kickstart the regeneration of areas. And I presume you're repurposing a lot of buildings as well, rather than building from

Robert: scratch.

Yeah. We, we do repurpose and we do ground up. My my belief that is that you have to be flexible and choose the right solution. Mm-hmm. Rather than just saying, oh, we only repurpose, there are certain buildings that are just not practical for repurposing. And I, I say that. Knowing that we do a lot of repurposing, the, um, the, we have been saying for a long time that bringing, um, capital into city centers to catalyze and, and restart regeneration sites through BTR is.

It's perhaps the magic ingredient [00:07:00] in starting these big projects that are complex. If you are purely going down a resales, uh, residential, um, approach, and you have to hit certain sales before you start, you might be waiting years for that project to start. The beauty of creating, as we have, for example, a maiden head mm-hmm.

The center of maiden head, um, had been in decline for a long time. The, the, our development one maiden head had. Sat around for probably 15 years, going through various ideas and iterations going nowhere. Uh. We came in, got a big planning consent, and then we bought in Get Living who funded all of the residential element of that and um, created the highest quality buildings in the town center.

And suddenly there's something to be proud about in the town center. There are people there, there's a ripple effect in the shops and restaurants and leisure immunities around. So that is a classic example of how you can kickstart, make something happen, where for [00:08:00] years and years and years, nothing happened in the center of maiden head.

Yeah. Uh, I would argue we also did it on our cro and site in, in Queen Quarter Wembley, and we are planning to do it in mm-hmm. In the Liberty Center in Romford.

Nick: Yeah. I was lucky. Ask, be working with you on the Liberty Center in Romford scheme and it is quite exciting to see the, the aspiration for council actually for, for bill to rent to come in and kickstart it, as you've said.

Robert: Yeah. I think if you look at the liberty, it's, it's an asset that has perhaps an infamous history. Mm-hmm. Um, it's not unusual in that the decline of the value of the shopping center was absolutely precipitous, but actually at the core of the Liberty is a central mall shopping center that is completely viable.

There's a lot of people who live there and a lot of people who want to shop there, so let's not lose that in the regeneration, but the peripheral areas of the shopping mall have declined. Mm-hmm. There's a great opportunity to do something different, to mix the offer of what's there. And at the same time as bringing people [00:09:00] into the Town Center to live, the quality of the shopping center's gonna be lifted at the same time.

So there's a, you know, there's a much more holistic solution to it than just saying, oh, let's just put some flats there.

Nick: Yep. We've done a number of consultations for Build to Rent schemes, and what I, what I find interesting is people who come to the consultations tend to be homeowners. Yeah. People 50.

Plus who just kind of don't understand. 'cause if they didn't go on that journey themselves Sure. That a 20 something now would find themselves. Yeah. I always say I couldn't afford to live in the house. I do now. I was fortunate enough to be able to buy a home at the time when it was affordable. I wouldn't be able to do what I've done.

Yeah. Whilst starting now in my twenties. Yeah. Um, how do you think we can explain better the role build to Rent has in solving the housing crisis? Because for so many people owning a home is, is the solution not rentals?

Robert: Yeah. So I think. A lot of 50 somethings probably recognize that their children who are 20 and 30 somethings mm-hmm.

Cannot afford to live where their parents lived. Mm-hmm. Um, if you can [00:10:00] offer a solution that maybe isn't buying but is a high quality residential solution, I think it is a very valid alternative. Mm-hmm. I think that, um, increasingly as built to rent. Um, gets larger and larger than the uk, which inevitably be, will do.

Mm-hmm. It will be more recognized by people. Right. It just takes time to recognize this typology and recognize the quality of what's being delivered. Mm-hmm. It's,

Nick: um, well, BTR provided 8% last year of new housing stock in England and Wales. How much bigger do you think that can get? Hmm. It's a difficult

Robert: question to answer.

Mm-hmm. Uh, in line with a lot of sectors in UK real estate, it BTR Multifamily BTR is really challenged from a viability perspective. Mm-hmm. If we can solve viability, I think if you just look at London mm-hmm. There's an almost bottomless well of demand for well located, well priced. Good quality residential accommodation.

Mm-hmm. The challenge is how do we build those and [00:11:00] how do we make those viable for people to invest in development?

Nick: Why is it just a simple explainer for some of our audience who aren't in development industry? Yeah. What is the viability? I. Challenge And why is that holding back, not just built to rent sector, but you could argue the residential sector full stop in London.

But what, what is it, what is the challenge?

Robert: Developers are caught in a sort of, uh, three point piner. Mm-hmm. Um, motion of declining, uh, values. So values of, uh, built to rent have declined as interest rates have risen. Yep. Uh, construction costs have risen and risen and risen remain stubbornly high. Mm-hmm.

Um, and there have been legislative changes. Then the third point is, um. Building Safety Act and Gateway two, building Safety Act is essential, uh, in terms of providing second staircases and, and fire protection Gateway two is, is part of that process, but currently at the moment it's completely on on. Uh, operative in terms of the [00:12:00] time it takes to get through Gateway two is mm-hmm.

Really, really unpredictable. If you add more unpredictability and time to the development process, you will end up with less development. Yeah. You will end up with less people taking the risk to develop. Mm-hmm. Somehow we have to find a way to solve the time it takes to get through Gateway two.

Nick: So how are institutional investors and other funders looking at development now given the gateway challenge

Robert: with a great deal of caution?

Yeah. Simple as that. Yep. Um, there's a lot of institutional developers. Uh, institutional capital providers who would like to do development, but frankly at the moment will not entertain it until there's more certainty on the timeline.

Nick: It just feels to me this should be a front page story every day until this is resolved, given the, the real life challenges.

This is, is bringing, 'cause we're not building enough homes and this is legislative change that could happen. And if you've got any solutions to what this, what

Robert: could be done, I think the industry as a whole is really, really active in talking about gateway two. And, and I know that. Um, I, you know, we are [00:13:00] reassured that government has heard and is trying to solve the problem.

I think there's still going to be a year, 18 months of, of mm-hmm. Uh, slow process, but. Our understanding is that there will be a resolution. I would like to see something like the building warrant system that exists in Scotland mm-hmm. Has existed for a long time and it works and adds relatively little time to the development timeline.

So there is a precedent in place. Mm-hmm. Um, comes from north of the border. That's not too, be too bright. Proud to bring that indeed south of the border. Yes, indeed. And make something that works is and is certain and not time consuming for developers. We will resolve the issue.

Nick: Yeah. Well here's hoping to that and certainly if the 1.5 million target has any hope for being hit, clearly that needs to be resolved by the government.

Um, in terms of the hub offer, um, you mentioned the start with Elizabeth flying. Yep. It's very notable. When you look at where you've developed it's next to transport hubs, do you think that is the sweet spot for Bill to rent next to transport hubs?

Robert: Well, the name hub. Came about because of transport hubs [00:14:00] and oh, a eureka moment in my mind.

Ah, oh, I did one. He came to me in the middle of a meeting and I thought, this is a good name. And also, you know, where you live as a hub of your life. It was as simple as that, you know, seems to have worked. Um, yes, within the context of London, I think public transport is absolutely key to successful build to rent as well as successful co-living.

Um, you know, if you want, um. To get the best outta urban life, you need to be, you need to be able to move around the big

Nick: city. Simple as that. Yeah. That's why when I moved to London, it was to live next to a transport hub. Everyone does. You didn't wanna be 45 minute walk from a, from a UBA train station.

It's not why you moved to London. No. Early twenties. No, really not. Um, planet people progress. Um, it's kind of one of a hub strap lines. What does it, what does this mean and how, how do you live it as a company?

Robert: Well,

Nick: I think

Robert: if you, if you look at, um, if you look at our. Just a couple of examples. Mm-hmm. Are a repurposing program, so we were one of the first.

Living space developers to recognize that there were gonna be empty offices. Um, [00:15:00] coming from the, uh, work from home trend, uh, we actually historically owned quite a lot of offices and we could see the writing on was on the wall. Mm-hmm. So four years ago we sold all our offices Right. And immediately set up a, a part of hub to focus on change, a change of use from office to living space.

Mm-hmm. So we now have, uh, six, um. Uh, sites where there were offices, uh, were getting, uh, change of use, uh, to living uses. So we currently have the only sewer generous co-living consensus in the city of London, uh, beach Street, which is the Barbon and, um, Aries and, uh, EC three. Mm-hmm. Uh, so those two, uh, I think, uh, kind of trailblazers for the, uh, ability to, um, not just knock old office buildings out, but to reuse them.

Mm-hmm. Um, so we've got those. We've also got Southern Bridge Road and Southern, which again is another, um, reuse. Um. Project. So when we go back to, um, our, [00:16:00] uh, our, our, our view on how we use carbon in the planet, um, we're very strong on repurposing. We're also building, uh, a, a wooden office building in maiden head as part of our one maiden head project.

That's, that is a requirement of the master plan. We are determined to deliver the whole of that regeneration. So when we talk about, um, the people side, um. Finishing that development and leaving high quality legacy mm-hmm. For maiden head and not just, uh, building the residential and leaving two empty plot is not the answer for Hub.

Yeah. Our answer is to finish this, deliver high quality buildings clearly re whos, which is, uh, Norwegian for wooden building. Mm-hmm. Um, we are then creating something that's completely unique in the terms Valley office market. Um, nobody else is building, um, a mass timber building. Mm-hmm. So, um. That development and the overall master plan really does encompass our, uh, planet and people part of [00:17:00] what we do.

Nick: And as part of the evolution of hub's noticeable, you are moving into another new sector, if you like, in co-living. Certainly a new sector for many people to have come across.

Robert: Yeah.

Nick: Just explain what is co-living.

Robert: That is a good question. Mm-hmm. Because it means different things to different people. People, yeah.

Let me tell you what, what hub believes co-living is. Um. We think it is studio residential in, uh, urban or ultra urban locations. Mm-hmm. With high quality shared immunity. And when I talk about shared immunity, the hub brand standards really focus on health and wellbeing and coworking. And those are the two key metrics that we look very closely at when we're developing our products.

Hm. And again, to come back to the thesis of transport, yes. Within the context of London, be clo close to transport hubs. So you've got great mobility and you've also got really strong local immunity on your doorstep. Mm-hmm.

Nick: The shared spaces point is quite interesting because I saw majority of people [00:18:00] who.

Kind of live in rental accommodation in London. So actually loneliness and feeling unconnected from people is, is a major challenge for them. So the, the co-living is possibly kind of a solution to that for some people?

Robert: Well, we, we have five. Um. Co-living sites. Mm-hmm. Uh, in different stages of planning around the city of London.

Mm-hmm. There's 550,000 jobs there. There's thousands of people coming into London the whole time. Uh, who don't know the city, don't know people. Mm-hmm. Don't know the geography. Um, work long hours. The benefit of being often within working diff uh, a walking distance of your office, having an instant social network in a building that is designed for interaction.

I think it's something that. Um, we're behind the curve on, uh, should have been developed as part of, part of the city's offer, the global financial center. Mm-hmm. Offering this kind of accommodation for people who may not be living in London the whole time, but want to have a valid experience whilst they in [00:19:00] invariably work very hard for the, shall we say, year to 18 months, that they might be in London,

Nick: but yields are higher for co-living than bill to rent.

How are you finding the institutional investment market is? Seeing this, is it gonna be a similar journey to what you went on when you started Hub? Yes. Trend do you think?

Robert: I think new sectors are always, uh, they're always slow to start. Uh, there's always the, um, lack of data that holds back investors. I think that is changing in co-living.

I think also co-living had a, a, a sort of false start in the UK and got a very. Bad reputation. So I think those of us who've been in it, so we've been in co-living really for about six years through our wood lane project. Mm-hmm. Trying to change perceptions on co-living and what it offers has been a big part of the journey.

I think generally, um, investors are more in tune with it now. I still think there's some way to go. Um, within the context of Central London, you do have a proxy data set through. High-end central [00:20:00] purpose-built student accommodation that helps people understand Yeah. Where co-living fits. Yes, there is a, a higher yield for co-living than BTR.

I think as co-living becomes increasingly recognized, I think that yield differential will close. Okay. And investors will look at, um, co-living as, as, as a, a living rented accommodation. And they'll make decisions on a building by building or location by location basis.

Nick: You mentioned the city of London there is where your focus, a lot of obviously would land as well, but the city of London is clearly a focus for your co-living.

I mean, that's quite specific. In a population of 8 million, uh, it's a square mile you are focusing on, there's no,

Robert: there's no accident in

Nick: that. Yeah. So do you think it can evolve out of Central, central London or not?

Robert: I, I think undoubtedly yes. And it's been proven to, uh, work, um, further out in London. Um, I, I think our view is that it works best really centrally in an ultra urban location.

Mm-hmm. [00:21:00] Um, but undoubtedly, um, it, it, it does work and will work in zones 2, 3, 4, 5 in London. Yeah. And will work in certain, uh, regional cities. Mm-hmm. But again, our belief is it works best in very urban environments rather than, shall we say more suburban.

Nick: Yeah. Um. Most underrated regeneration opportunities that you see.

You know, you, you, you, you are very clear that hub is, can be a catalyst for regeneration. Yep. Um, so looking around, firstly London, there may be the rest of the country. Where do you see as the places that hub could next go to to really kickstart the regeneration, like you've mentioned in maiden head?

Robert: So the concept of regenerating, shall we say, underperforming.

Shopping center sites, there's nothing new about that. There are big challenges in turning shopping centers around physical challenges, so I wouldn't say that's kind of some sort of hidden secret, anything like [00:22:00] that. I think there's still, for me, there's still an awful lot of. Public land that is underutilized.

Okay. I think that if there was a greater understanding between developers of BTR and local authorities mm-hmm. As to the benefits of BTR, the, the, the way it, it can kickstart and catalyze development, I think that public land could be used to make things happen, start things. And it won't be the only interpretation on that land, but it could be the thing that is the beginning and then perhaps you can have other uses, uh, that follow on from there.

But getting regeneration started is the key, and we have proven time and time again that build to rent is very, very effective at doing that.

Nick: It's an interesting point. So if, if. You had a development of 200 flats for sale versus 200 flats build to rent. What's the difference in occupancy times? Um, do you think, because I mean, 200 flats are not gonna be put in the market at the same time, I assume they're [00:23:00] sold at different stages.

Yep. So I just think people, some people quite listening might be quite intrigued by, I hadn't realized the. Difference and the speed in which you can deliver people living in an area that build rent when you can, could for sale, what would you see of a, the differences there?

Robert: That's a difficult question to answer.

There's no question at the moment that, um, uh, residential resales in the UK extremely slow. Yep. Uh, at the moment. Yeah. So, um, I would say in terms of bringing people into city centers mm-hmm. Um. If you fund and deliver bill to rent, you will get a quicker, um, result than perhaps waiting for, uh, sales to get to a certain level before you can start a resale uh, program.

If you build something out and, and, you know, with current sales process, it will take a long time to say, sell out 250 units in a development. So as things stand right now, I think BTR is the quickest solution.

Nick: So what, um, what other trend should we be looking for in 2026, uh, for next year? If you, you are crystal ball gazing, where do you think, [00:24:00] what do you think the trends are gonna be?

Where, where, where are hub going to be looking?

Robert: Uh, I, I think you're going to see, um, you're gonna see more investment in, uh, co-living. Mm-hmm. I think it increasingly is seen as a, a valid. Part of the Living space formula, shall we say. So I think that is gonna continue. I would like to see renewed commitment to multifamily VTR, particularly in greater London because I think it has so much value to give to people.

What do you mean by

Nick: multifamily? Sorry, just so people are clear. Yeah,

Robert: sorry. That's slight, slight joke and that that really means, um. FLATTERED developments right in, in greater London. Okay. Um, and I'd like to see renewed commitment to that. Um, you know, we, we need to be tackling viability so that those homes are delivered.

And also as they're delivered, there's also a lot of affordable housing delivered with them. If I look at our CRO and Scheme, queen Queen's quarter, that was 52% affordable housing. Right. So this isn't just a private solution. Mm-hmm. This is also an [00:25:00] affordable solution.

Nick: You've been on quite the journey in your built environment career, what advice would you give to someone starting today who was looking to start a career in development?

Robert: My, uh, my number one, uh, recommendation would be, don't think you can make a quick bark in development. Mm-hmm. Go into development because it's really interesting, super challenging. And when you. Deliver things incredibly rewarding. Mm-hmm. Yes. Sometimes you can make money out of it, but I always say it's easier to lose money in development than make it, but go into development for the right reasons.

I think it's the most interesting thing in real estate. I think it's the most challenging. I think it demands. The greatest brains of our industry to get it right, particularly regeneration when you have multiple interests that you are trying to, um, bring together to get the best result. Mm-hmm. [00:26:00] Um, look at it as a fascinating problem solving exercise and how rewarding that is, and then the legacy of what you deliver.

Mm-hmm. If you get that right, you will also get financial rewards. Yeah.

Nick: I suppose like children, all of your developments you're proud of. Yeah. Um, they're equally, you know, equally loved. But if there was one development, just finally, what, which, which one do you, oh my god. You say you're talking about a legacy here.

Yeah. Is there anything that you've been working on, um, really from the start and Knight Frank to today, but you look back and think, yeah, I'm that one really. Everybody at

Robert: Hard knows. My favorite project, um, I don't have a favorite child, but I have a favorite project. Okay. Uh, it's our maiden head project.

Right. And so one maiden head, why do I like that? Because again, going back to we, we solved so many problems. Mm-hmm. Uh, there was still 17 ownerships on the site that we, we, we didn't control. Yeah. We had to do a CPO, very complex. Right to light. We went through various fluctuations, Brexit, COVID. Mm-hmm.

Before we funded it. [00:27:00] Um. We've got a great long-term partner in S Med vg. Working with that kind of long-term patient capital is incredibly rewarding. Mm-hmm. In regeneration. And also just seeing the change of what we've done. Yeah. So unambiguously one maiden head is my favorite, but there are various others also that, you know, are, are close to my heart.

Yes.

Nick: Well, I imagine the case. Robert, thank you very much for your time today. Really enjoyed

Robert: it. Thank you.