If we want institutional capital, we must behave like an institutional asset class
By Brendan Geraghty, CEO, 黑料专区
Last week asked a question our sector should sit with for a moment: after more than a decade of BTR in the UK, why do we still know so little about what it costs to run our buildings?
Keith Cooper’s investigation went looking for operating cost data across the fifty largest BTR landlords. Only ten made any mention of operating costs in their accounts, with the figures so inconsistently defined that comparing them is meaningless. Reported costs per unit ranging from a few hundred pounds to more than fourteen thousand don鈥檛 describe a spread of performance rather the absence of a common language.
These findings don鈥檛 mean operators are running their buildings badly, far from it, the best in this sector run exceptional operational businesses on rich internal data but they do reveal what opacity costs us. BTR is not a cottage industry anymore, the capital being sought comes from pension funds and sovereign wealth, investors who can put their money into any asset class, in any country, and who underwrite everything. When they ask a simple question about operating costs in UK BTR and the honest answer is that no reliable, independent benchmark exists, we make ourselves harder to buy. Not impossible, just harder and in a world of thin margins for error, harder is expensive.
The timing makes this urgent rather than merely interesting. Knight Frank’s analysis this spring, drawn from 126 multifamily operating budgets covering around 35,000 homes, found operating costs absorbing roughly a quarter of gross rental income on average, with wide variation by region and scale. The same research shows operating costs up 19% since 2023, while rental growth expectations have settled at low single digits. When costs rise faster than income, operational performance stops being a back-office concern and becomes the whole investment case. You can鈥檛 manage what you don鈥檛 measure, and you can鈥檛 reassure capital with data you refuse to share.
Closing the data gap highlighted by the article is why the ARL is building a for the sector, with seven of the largest operators already committed to contributing data from their systems.
Member-owned matters. It means the sector’s own evidence base is governed by the people who create the data, accessible to members and to government, rather than locked behind commercial paywalls. Contributors share on consistent definitions, so like is finally compared with like and first publication is coming later this year.
Some respected voices in Keith Cooper鈥檚 article argued that opacity is not deterring investment today, and that yield and rental growth worry investors more. They may be right about today, but my concern is tomorrow. The sectors BTR competes with for allocations publish their numbers as a matter of routine; sharing information is business as usual in mature, sophisticated markets and not having it, dare I say, suggests the opposite.
Transparency is not the surrender of competitive advantage. The advantage was never in not publishing the numbers, it鈥檚 in what you do about them.