Build to Rent (BTR) – literally ‘build to rent’ – is a new housing formula that has only recently developed in Italy and is now very popular among institutional investors attracted by the increasingly attractive returns of this residential sub-category, a segment that has historically been alien to such investors precisely because of its low yields.
Italians’ traditional passion for bricks.
Since the post-war period, owning real estate and land has been part of the DNA of Italians. Eight out of ten Italian families own the house they live in. About a third also own a second home.
Real estate alone is worth more than 60% of total household wealth, a concentration of wealth in this asset class that cannot be found in any other western economy: almost 6 trillion, well above the value of the entire mass of savings and financial investments, which stands at just over 4 trillion.
Historically in Italy the purchase of a main home has been preferred to renting in the strong conviction that paying a fee for the use of an asset such as a property destined to last a lifetime is ‘wasted money’ and that it is instead wiser to invest one’s savings in the safe haven of bricks and mortar.
This widespread conviction underlies the decision to resort to renting, instead of buying a house, only as a extrema ratio, to meet temporary and temporary personal or work needs.
Favoured historically by the ease of access to the banking system for the purchase of one’s own home and penalised by a legislative landscape that penalises landlords, the residential rental formula has never really caught on in Italy, contrary to what happens in other European countries, especially in Northern Europe.
Following the Covid-19 crisis, the importance of residential real estate (first and second home) for Italian households has increased, paving the way for new housing formulas to meet changing needs.
The growth of residential leases in Italy and the spread of ‘Build to Rent’.
The spread of BTR in Italy has been fostered by the emergence of professional operators capable of managing, through property management, large housing-only complexes to be rented out and held as assets, and especially as a result of the growing demand for rental properties, including short- and medium-term ones, particularly in large cities such as Milan and Rome.
BTR represents the most advanced model of residential housing that provides tenants not only with the availability of rented accommodation, but with a whole range of ancillary services in the building, well organised and professionally managed with the help of technology and home automation.
BTR properties are aimed at a wide catchment area, consisting mainly of young people, singles or couples, older people or even young families with young children.
Moreover, considering that this formula is often offered in newly built or newly renovated buildings, the BTR formula allows people to live in renovated, comfortable spaces with low energy consumption, a crucial aspect today given the rising costs of raw materials.
Build to Rent efficiency criteria.
Ecco perché oggi la formula del BTR piace e viene vista da tutti come il “futuro dell’abitare”, inserito anche nelle Smart Cities: non si tratta solo di nuovi modelli di residenza, ma anche di nuovi microcosmi e spazi di socialità urbana.
Today, the financial sustainability model in Italy requires at least 100 housing units in the same building, ideally at least 200-250 units, in order to be able to offer a series of common services ranging from the most basic, such as the locker for receiving deliveries ordered online – sometimes even equipped with coolers for groceries, the gym or even a kindergarten, etc. The higher the number of units that make up ‘the community’, the broader and more sophisticated the range of services can be, to guarantee residents a truly unique living experience.
Digital solutions and future perspectives.
The satisfaction of tenants’ needs is ensured with the use of digital platforms for managing home automation services that manage and allow them to monitor everything that happens in their unit and building and, in some cases, even allow them to manage their expenses and make payments.
This is why today the BTR formula is liked and seen by all as the ‘future of living’, also included in the Smart Cities: it is not only about new models of residency, but also about new microcosms and spaces of urban sociality.