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Amro Partners’ resi evolution

Raj and Ami Kotecha are something of a residential real estate power couple – the husband-and-wife team founded Amro Partners, a build-to-rent, student housing and co-living specialist firm with a UK and European portfolio edging towards £1bn in gross development value.

But it’s taken work. The pair, who met at the London School of Economics, joke that they did not “fall in love at first sight” – or at first site. Their first entrepreneurial venture as a married couple was not a real estate foray but a food business founded “on a shoestring” in Kenya.

The pair grew the business from East Africa into West Africa and then central Europe before exiting when they relocated to London in 2010.

Two years later they opened the doors at Amro with what Raj calls “a clean sheet of paper” on which to map out their plans. By that point, the lure of real estate was strong.

“Student housing, even post-GFC, was still active, very defensive,” says Raj, who is group chairman and chief executive, with Ami as group president. “The supply-demand fundamentals in the UK market were compelling, and it seemed to be a very clear opportunity.”

Partners and projects

Amro started off with single-asset deals in the UK student space, the first of which was the Rex in Kingston-upon-Thames, an office-to-PBSA conversion. From that beginning the company started scaling into the BTR market in the UK and the student housing market in Europe.

Its first venture into the European market was in 2018, when the firm struck a PBSA investment in Milan. Shortly after, it took the plunge into BTR in the UK with the Wiltern in Ealing, west London. That project, being delivered in partnership with Pension Insurance Corporation, is an art deco-inspired 15-storey, 278-home scheme that will deliver 35% affordable housing.

“The rationale for that next step was as we were scaling the business, we felt the UK student market was a more mature sector,” says Raj. “We could apply the lessons we had learnt from our student venture to opportunities that were earlier in their evolution such as the UK BTR sector. We felt we could better scale in those sectors.”

Today, existing assets are being rethought. The Rex is now being converted to a micro-living scheme – smaller co-living homes. The £80m GDV, 202-home scheme has ambitions to become one of Europe’s most sustainable buildings.

The project also marks the beginning of Amro’s affiliation with NTT Urban Development Europe, an offshoot of a Japanese developer making its first investment in the UK’s residential market.

Integration and innovation

The Kotechas attribute Amro’s growth to their decision to handle all parts of the supply chain in-house, building a vertically integrated company. Ami says the duo “toyed with the idea” in their first year of business but decided to appoint Unite to manage the then-PBSA site at the Rex.

“It was like a friendly hand-holding that they did for us, which is really useful, and we learnt a lot from them,” she says. “We realised very early on that staying close to the customer is going to be critical in the long term for what we do and how well we do it and we launched the philosophy to become vertically integrated.”

In practice, that means Amro processes the acquisition, investment and operational aspects of the business in-house after partnering with investors. It has a huge impact on the company’s product design and ability to prioritise sustainability, Ami says.

Raj adds: “Being vertically integrated allows us to also deliver our ESG ambitions as well as our technology and data science ambitions.”

The company’s customer-first approach goes hand in glove with its focus on innovation. Ami says due to Amro’s size, the company is “very agile” when it comes to implementing innovation in its strategy.

“The size of our company means we can drive innovation and see results coming through quite quickly. We are very agile, and it is a constant process,” she says. Amro has set team members’ KPIs and targets around innovation and has established a data analytics and data science team.

Ami is aided by her role as chair of the UK PropTech Association, which merged with the British Property Federation earlier this year. She has also been appointed to the board of the BPF and is working on a strategy for driving innovation and tech adoption across the property sector.

Ami says of the merger: “It’s a huge moment for proptech and if we play this right we really can pivot this into masses of innovation for the real estate sector to everybody’s benefit. I think everybody’s going to win from this.”

Ami is focusing on making digitalisation central to the industry’s strategy.

“In many massive real estate companies there is a focus on data but it can be siloed still,” she says. “There can be digitalisation of processes to an extent but the senior team may be old-fashioned still so there might be a little bit of an abrupt end to where that process actually goes.”

Her vision is to use the merger to create sandboxes for innovation to address specific pain points, whether on the finance and fintech side, adoption of AI, or how data is used to future-proof the industry.

“We don’t want to have half-empty office buildings. We don’t want to have Oxford Street looking like it is today,” she says. “There are loads of problems in real estate that we need to solve. How can we resolve those in a way that we’re using data science and data analytics to realise and optimise the value of those assets?”

Doubling down on London

Amro is using data and AI in its investment decision-making process, something Raj says is crucial in deciding which deals to do.

“Comparable rent is an area where, if you take a step back and look at how investments are underwritten, typically in commercial residential real estate, it’s very old-school, very static,” he says. “Somebody does a rent review, a rent check, and it goes into a spreadsheet or a report and may be four months old by the time it gets to the investment committee.

“So having better data, more current data, more granular data, improves your investment decision-making, and we’re bringing that to bear in terms of all investment decision-making. We’re at the early stage now of starting to apply AI to that process, but we can already see that’s going to be very powerful.”

The company is refocusing and redoubling its efforts in London, where Raj says the team is seeing “sustained and very strong occupancy across the market”.

He adds: “We’re encouraged certainly by the continued vibrancy of London as a city. That’s not to talk down the prospects in Manchester or Birmingham. But I think from a fundamental supply-demand perspective, and also from a complexity perspective, we are of the view that London will continue to be in very short supply of rental housing and, in fact, all housing.”

Beyond that geographic focus, the company is looking to shake up its institutional investment partners. Raj says the “next step” is to begin partnering with long-term pension funds and sovereign wealth capital funds that want to invest on a time scale of 15-20 years.

“That’s a natural evolution and we think we’re ready as a team and as a business to be able to take that next step,” he adds. “We think we’ve developed a skill set that allows us to perform as a good partner to that sort of capital.”

To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @AkankshaEG or @EGPropertyNews

Portraits by Tom Campbell; other images from Amro Partners

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