It has been a busy year for Moda Living. As well as opening the second phase of its operational build-to-rent (BTR) neighbourhood Angel Gardens in Manchester, the developer and operator is pushing a £2.5bn pipeline of assets through planning and construction amid unprecedented economic and social disruption.
Group chief executive Johnny Caddick spoke to Property Week about its progress.
How has the business coped with Covid-19?
First and foremost, the team has been amazing. I’m very lucky to lead a terrific team of 40 who responded immediately to the obvious challenges Covid-19 presented us as a developer and operator of next-generation neighbourhoods.
The biggest worry was whether we would be forced to halt construction at the start of lockdown. As a developer and contractor, when you have hundreds of tradesmen working to tight deadlines on sites across the UK, you look at your cashflow and think: ‘Crikey, if all this stops, what happens?’ But the government was very good in allowing the industry to keep going. Most of our projects are progressing nicely; it is only in Scotland where the programmes have fallen back slightly.
We decided to use lockdown as a time to grow within the general living sector, because there are so many opportunities. We have really been busy, which is great.
How will Covid-19 impact the BTR sector in general?
There is a huge appetite for BTR and the residential sector more broadly. I think Covid-19 and 2020 will be remembered as a catalyst for BTR; it has accelerated the trend of people wanting to live in high-quality, well-managed environments where they are well looked after.
It is going to be the most exciting year for us to date, so watch this space
Investors have been attracted by the very granular income; and rent collection rates across the sector have been fantastic – 96% between January and August for Moda. So the sector has proven its defensive qualities and as a result institutional appetite is growing.
How have you looked after your residents at Angel Gardens?
We followed government guidelines about amenity spaces and thought hard on our feet about how to keep residents together and motivated. Our health and wellbeing strategy has been core to our business DNA from the start, but that has really come into its own during Covid-19.
Using our digital platform and the MyModa app, we sold out 100% of our 78 virtual events including pasta-making classes, beer tasting and balcony fitness sessions. We had more than 33,000 app engagements during lockdown. We also launched our parcel locker system last month, receiving 1,328 parcels in September alone with none lost using the system.
Where are you at with other schemes?
We have a pipeline of 8,000 new homes in the UK, with a combined GDV of £2.5bn and growing. The aim is to have 10,000 residents by 2025. The Lexington in Liverpool will open next year, and we are on site for The Mercian in Birmingham. Leeds and Edinburgh are also on site, while Glasgow will be on site in the coming months.
We have permission in place for Brighton & Hove now and work on that will start in Q1 2021. It is a fantastic location and our first neighbourhood not in a city-centre location. One of the things that BTR is realizing now is that you do not necessarily need to be in the heart of an urban environment – some people want the proximity but with some distance.
How is Moda’s ESG strategy progressing?
ESG is a very broad subject, isn’t it? Environmentally, during the build phase we work with contractors that share our vision for sustainable procurement to ensure the materials we build with are environmentally sourced.
As a company, we are targeting net-zero carbon. We can contribute to solving the national housing crisis with sustainable homes. Only a fraction of emissions come from the construction phase – most are operational.
By working with Utopi on green energy provision, saving and storage initiatives, Samsung for low-energy white goods and other carbon-offset partners, we can counteract the emissions generated during the construction phase. This translates through to our residents, who have access to eco-friendly amenities. We have also banned the use of single-use plastics.
On the social side, our health and wellbeing strategy is built into everything we do. We believe that by using smart IoT data, we can change the way our buildings are built. ESG is high on our agenda and I think our focus on proptech and vertical integration is going to play a big part.
What will we see from Moda next year?
We have some very exciting announcements coming out across the piece. I think we will definitely see a lot of growth in the BTR market and living sectors. We have been investing in the infrastructure for years now and we want to capitalise on our market position as one of the early movers in the space. It is going to be the most exciting year for us to date, so watch this space.