2022 has been a year of contrasts for the residential: Increasing expectations from customer service on one hand vs. increasing rent and energy prices on the other. Decreasing vacancy in rented assets, and decreasing interest in build to sell.
We're about to enter another year in which the rented asset types are surely expected to be the trusted source of revenue for operators and developers. It is the right time to reflect on the learnings from 2022 on tenant demands and needs to understand what it takes to keep them longer.
Is it the location that still matters the most, or do tenants fancy a bigger living space as an impact of the pandemic? Does the beauty of the interior design play a role in longer tenant retention, or is it the beauty of the community? What tech enablers serve as problem-solvers? Is it smart access, parcel management, or issue reporting? How do generations differ in their preferences regarding what they want from their buildings?
We've elaborated on those questions in our What Tenants Actually Want webinar, together with our Customer Success Manager Ben Lampard, our Head of Marketing Petr Boruta and Parcel Tracker's Co-Founder Arthur Zargaryan.
If you've missed it or if you enjoy reading more than watching the webinar recording, let this article walk you through what we've found out from the tenant survey results carried out with 333 tenants in October-November 2022. Note that the majority of the tenants were between 15-25 years old student accommodation residents from the United Kingdom.
The Key Learnings
When asked the question “What factor is the most important for your living experience'', the tenants answered that the location & neighborhood (75%) and the size of their apartment/room (68%) are their first choices, while having sports and wellness facilities is their last priority.
When asked the question “What tech enabler is the most important for an easier & more enjoyable living”, the tenants answered that digital parcel services (72%) and online issue reporting are their first choices (67%), while tracking energy consumption digitally is their last priority.
01 Location is the single most important aspect for young tenants' living experience.
02 For more than 60% of tenants, the size of their apartment or room is important.
03 The tenants are evenly distributed on the level of importance they attribute to the community in their buildings.
04 For almost 75% of the tenants, parcel management and issue reporting are the priority tech add-ons to their life in buildings. Online payments and smart access to the building are also valuable tech add-ons.
05 Surprisingly, for 60% of the students monitoring energy consumption online and sustainability practices are not of high value.
Now, let's elaborate further on the findings, and what matters to the tenants the most.
When asked how important the location & neighborhood of the living is for their living experience, more than ¾ of tenants found it important, while for around 20% of tenants this doesn't play a big role for their living experience.
“Many buildings that are central-located are old, and don't have the best amenities. But they sell out first. Location drives everything,” says Arthur.
What is it that makes a neighborhood an ideal location? Does that mean something different to each tenant?
According to Ben, it is entirely dependent on the audience: “I remember that when I was a student, I wanted to be as close as possible to the university, also close to where things are happening. You want to be well-connected to transit lines as well. If you look at co-living tenants, they want something slightly different. If you are a young family, do you want to live next door to the university, near the pubs and clubs? Probably not. You'd want to live in a greeny suburb, where you can get a cup of coffee, push your stroller around, and walk the dog in the park. Though these days the character of the location changes fast, as the up-and-coming neighborhood of the year is a constantly evolving notion, especially in cities like London, considering examples like Peckham or Brixton.”
02 The size & Design of the apartment / room
When asked how important the size of their apartment or room is for their living experience, more than 60% of respondents found it an important factor, while for around 30% of tenants this is not a game-changer.
The size of the apartment or the room is usually an important factor for the majority of tenants in all asset types, just as we see in the survey results here.
But, what is the reason that more than 30% of tenants do not see this as a priority? “Considering that the majority of respondents reside in student housing, the room means a sleeping pot for them. They are mostly out studying, or socializing,” says Petr.
“During the pandemic, we were locked into our places, and that was difficult for a lot of young people. Now, common spaces in the buildings are open again, so people give less importance to the size of their own spaces,” remarks Arthur.
The survey has also shown that interior design is almost as important as the size of the place. What can be the reason that more than 35% of tenants don't find interior design as a game-changer to their living experience?
Arthur comments: “The asset type and age group play a role in this. A popular Gen Z trend is to be more into experiences than material things. Some of these tenants live in old properties, and some in new – but all of them are well-maintained. I believe that what they care more about is the general convenience or experience.”
Ben adds: “If you consider the living costs in the UK, especially in London, and also that attractive places cost more... It is natural that some students don't see interior design as the biggest priority.”
Around ½ respondents think that the building community is important, while the other half don't observe this as a big role-player for their satisfaction with the living experience.
“Communities can be built everywhere, be it a co-living space, student accommodation, or an office. Each community would have a different character, but they all can certainly work well if nurtured well,” says Ben.
“It all comes down to strong communication,” says Ben, when we ask how building operators can build and nurture communities.
“No feedback is bad feedback, so always make sure that your tenants are reporting how they feel about life in the building. Inconveniences will surely arise, and tenants might want to use the common communication channels or the tenant newsfeed to share their negative feedback. That builds up the negative energy in the building. To avoid that, have rules for using communication channels. A ticketing system, direct messaging or emailing to the property manager can help with collecting negative feedback. Never let tenants' posts or messages go unanswered. Keeping the communication up to date is very, very important to show that they are heard.
While the community is generally regarded as a core factor of almost all asset types these days, how come half of the respondents here haven't considered it as one?
Arthur responds: “PBSA communities are a bit different than other residential communities. We observe that their communities flourish without the support of the building management. After the initial spark in the first week with a welcome event, they find their own communities or friend groups.”
04 Parcel Tracking Services
The high majority of the tenants find having digitally-enabled parcel tracking services important for their life in the building.
And how does tech-enabled parcel management make operators' and students' lives easier? How has it evolved from a nice-to-have to need-to-have over the last few years?
Arthur responds: What changes we observe is that the number of parcel orders per person is constantly increasing since the pandemic. At the beginning of the academic year, it's insane, or in the Black Friday week as well. The landlords who didn't need a parcel management system a few years ago started to come to us with this request, as they started to have a growing pile of deliveries. That opened ways for digital parcel management tools such as a mailroom management software to get popular for new asset types as well. The reason why tenants find parcel management so important is that when you order something, you want to make sure that it arrives even when you're not at home. If the property operator has a solution available to handle this properly, that creates a Christmas feeling for the tenants as if they're receiving a gift from the operator.
How does smart access in parcel management work?, we ask. Arthur says “When you offer keyless access to the building and parcel room, you can easily give access to the couriers, so they don't have to ring the bell and ask for assistance from the reception many times during the day. Then, the tenants get the notification that their parcel has arrived. They enter the parcel room with smart key, collect their parcel and then confirm the process being completed on the app. There are different ways to enable this technology, completely staffless or hybrid. The integration with smart access saves so much time to the building staff, as well as the tenants.”
05 Reporting issues & Ticketing
More than 60% of the tenants agree that digital issue reporting is a valuable tech enabler for their life in buildings.
Tech-enabled issue reporting is indeed a problem-solving feature for many Spaceflow clients and their tenants. How can we relate that to customer satisfaction, we ask Ben. “It comes down to the fundamentals of how a building works” he responds. “You can build the fanciest building in the world, but if you can't deal with simple problems, you won't make tenants happy. Issue reporting is the fundamental that you need to make right, simple, and easy.”
“You stand a higher chance in keeping tenants satisfied if you let them know how the issue is being resolved. Solving it via email gets very bulky, since there is usually a long email thread, the landlord or tenant can't keep track of who's solving what issue. A well-performing ticketing system would also allow the tenant to share their satisfaction rate as a ticket closes down, which is another benefit of making things as digital and customer-focused as possible.”
Conclusion & Action points for 2023
Every building and its tenants are different. They come with varying characteristics, demands and needs. Continuously improving customer satisfaction is the core duty of all building operators. We hope that the survey findings become an inspiration to get to know their tenants better.
What are the learnings from these results for the residential operators with young tenants? How can they make use of this survey and data to improve their operations?
Arthur and Ben agree: We recommend all operators to audit their services regularly. Simply make sure that your fundamental operations are working well for a stress-free living. This can be as simple as the internet connection in the building, or issue reporting and parcel management. Also note that what didn't come as a priority now may change drastically the next year. For example, now students don't track their energy consumption because they pay for energy bills included in the rent. That might change with the ongoing and future energy struggles. That is why regular auditing and keeping track of trends come crucial.
about The Survey: What Tenants Actually Want
The survey is conducted anonymously with 333 tenants, 306 of them residing in student accommodations, and 27 in co-living buildings. 282 are between 15-25 years old, 47 of them are between 25-35, and 4 tenants are above the age 35.
The survey was conducted with our project partner Parcel Tracker, producing a cloud-based internal package tracking app for residential, commercial and retail properties.
The answers were collected in October - November 2022 via an online questionnaire distributed to tenants via private emails. All of the respondents are the tenants currently living in buildings operated by the clients of Spaceflow and Parcel Tracker.