The concept of Build to Rent (BTR, Build to Rent) is setting a trend in real estate development globally. This model offers benefits for tenants and investors and stands out for its modern, comfortable and functional design units, specifically intended for rental.
Its advantages include lower use and maintenance costs, higher investor profitability and professional management of rental income.
Construction promotions Build to Rent They were born with the objective of being offered for rent from their conception and are an opportunity for those who want to live in high-quality homes without the need to buy or commit long-term. The modality allows access to standard homes without large initial investments.
The origin of the model dates back to the United Kingdom, in the context of the 2012 Olympic Games in London. The need to find a use for the Olympic Village apartments led the local administration to offer them for rent at affordable prices. It was a successful strategy: it not only responded to a local need, but also laid the foundations for a trend that would spread throughout Europe and the US, becoming a housing solution of increasing popularity.
According to Moebius Real Estate Consulting (of Uruguayan origin), Germany leads the BTR segment with 40% of the investment, followed by the Netherlands with 15%, Sweden with 12%, Denmark with 9%, and Spain and the United Kingdom tied for fifth place with 6% each. In the context of Latin America, Chile stands out with 89 buildings already completed, 21 under construction and 18 planned for next year. Colombia advances with several projects in Medellín and Bogotá. Mexico, for its part, is promoting developments in Guadalajara, Monterrey and Mexico City. In Brazil, a company leads with 11 ventures underway and another 12 in the negotiation stage.
In the Uruguayan capital, on average, a Promovida Housing property is worth USD 290,560 on average with three rooms and less than 3 years old. While a rent ranges from USD 700 per month
In this format, anyone who buys a home in Uruguay to rent will obtain a return of 6% per year in dollars. “After the enactment of the Promoted Housing Law in 2011, foreign investors (with a high percentage of Argentines) invested in more than 3,000 homes focused on the rental market. Recently, we noticed an increase in the interest of foreign companies, especially from the region, in acquiring land with the purpose of developing buildings, all aimed at selling and then renting in Montevideo and Punta del Este,” he explained to Infobae Gonzalo Martínez Vargas of this consultancy.
Argentina is presented as a promising scenario for the development of the rental market, driven by growing demand globally for economic and social reasons. The recent repeal of the Rental Law and the modifications introduced by the DNU created favorable conditions to reactivate investment in this sector. As a result, some areas such as CABA and Greater Buenos Aires saw their rental supply triple.
Looking ahead, adjustments in the relationship between rental prices and salaries, together with the elimination of exchange restrictions, could motivate both local investors and international funds to more actively explore the Argentine market, especially in the BTR segments.
Juan Yacopino, president of the Urban Planning and Housing Commission of the Argentine Center of Engineers and of the Sustainable Development Commission of the World Council of Civil Engineers, noted: “The unique opportunity that this format and sustainability represents to promote a more integrated and efficient urban development in Argentina. This requires revitalizing sub-centers and urban areas with underutilized infrastructure through public sector support, similar to what was achieved with the Promoted Housing Law in Uruguay.”
Adopting a similar strategy in Argentina, a National Sustainable Urban Planning Law could be developed to promote a more cohesive city model and offer a greater variety of rental options.
“They optimize space by maximizing functionality and common areas, with advanced technology for energy efficiency and lower consumption. Professional management covers administration and maintenance, improving income and efficiency,” Yacopino explained.
The possibilities of implementing this model in Argentina in the short term are limited.
Jose Rozadosfrom Reporte Inmobiliario, explained: “This approach demands long-term sustainability, which requires, in turn, an environment of consolidated macroeconomic stability that allows the sustainable development of the system, both in number of projects and in market share.”
The demand for housing constitutes a prevailing need in all localities of the country, thus providing an opportunity for the implementation of the model in different areas.
“However, it is crucial to carry out an analysis of the conditions of payment accessibility and other characteristics of local demand. Therefore, initially I consider that this model is more suitable for middle-class areas or neighborhoods, whether high or medium density,” added Rozados.
If the right incentives are in place and there is an orderly macroeconomic situation, the chances of investments increasing are high.
Marcelo Busellini, current advisor to the National Housing Secretariat, said that “it is essential that provincial or municipal governments are willing to offer incentives (such as tax exemptions, contribution of land, agility in project approval, among others), particularly in areas that would benefit from greater densification. The demand for housing always exists and is present.”
Large cities, by their nature, act as main poles of attraction.
“Local governments have a crucial role in facilitating this development, especially in areas that need to densify,” Busellini said.
Private builders and developers would need access to credit to build BTR buildings on a large scale.
Cities with economies focused on tourism, which face housing crises due to lack of permanent rental housing, can see in the BTR a way to increase their housing supply.
These buildings offer significant advantages for both investors and tenants. The former can obtain higher rents by renting units in buildings specialized in BTR, while benefiting from professional management that reduces operating costs and minimizes maintenance and administration inconveniences.
“In CABA, two BTR (sustainable) projects are currently being developed with innovative approaches that promise to make differences in design, construction and management, compared to the traditional permanent rental project,” Yacopino concluded.
