Redefining Resi: From short lets to branded living with Maxine Leufroy-Murat (Sejour Living)

SPEAKER_01 0:00

You live in a world where lifespan of companies is getting shorter and shorter and shorter and shorter. And if you don't pivot, you die. So you need to constantly keep looking at trends and understanding what works to try to change the way you work and attract different types of customers and speak their language, etc. So it is key to survival.

SPEAKER_00 0:26

My name is Jessica Gillingham, and I am the host of the Pillow Talk Sessions podcast. And my guest today is someone I've known for many years. His name is Maxime Lefoy Morat, and he is the founder and CEO of a number of companies: City Relay, Opago, LaFroy, and then also his new venture, which is Sejour Living. We talk about Maxime's journey going from short stays with City Relay to this new venture into the branded residential living sector. And we talk about the nuances, the differences, the path from short stays to Resi and branded Resi and the living sectors, and why he's taken that path, what it means, the different nuances in both of those marketplaces and uh his whole journey there. It's a really good conversation. So I hope you enjoy it and do listen in. Maxime, thank you so much for coming on the Pillow Talk Sessions podcast. I have long wanted to have this conversation with you. So thank you very much for making the time. And I'm really, I think you've had such an interesting journey and you've got really interesting sort of not just perspectives, but experience that I think will add a lot of value to our audience. So let's crack on with the conversation. But firstly, Maxime, can you give a brief introduction of yourself and your companies? You've got a number of companies, and we will go into that evolution during the discussion, but uh but a quick intro would be wonderful.

SPEAKER_01 2:09

Thanks, Jessica. So quickly, yeah, I'm uh I'm French from Paris. I came to London about 17 years ago as an equity trader at Morgan Stanley. And uh and then I left this job and I started a bunch of startups, and I started my journey into the shortlet sector about 12 years ago, roughly. So it was a time where we could you know master lease properties and and shortlet them and try to deliver uh higher income through uh arbitrage, and then very quickly I started City Relay, which is one of the leading shortlet management companies in London. Uh so we were managing properties on behalf of owners on a on a revenue management basis, uh, revenue share basis. And um and so when I started this business, you know, I did everything myself. I was really, I mean, it was a startup, you know, working from my flat with a bunch of interns, and uh and and I learned to run operations. We scaled that business organically with no external funding initially for the first five, six years, up to 50, 50 employees and I think four or five hundred properties. So really scaled it uh organically. And while doing this, um we started to build really solid operations, and so we grew the operations for us, and initially we did everything in house. I mean, we had even rollers and we were doing all the ironing and the linen, and everything was done in house, and and probably that was a mistake, clearly. So we stopped doing that. But at the same time, we learned a lot about operations, and we learned about the difficulty that short let operators have around those activities, and we started to sell operations, and there was the birth of OPAGO, which started at City Relay Solutions, but eventually grown to be OPAGO, which currently manages around 5,000 units in London, the 2,000 in Paris. And that company does all the housekeeping, leaning, maintenance, check-in through a tech-enable platform. So we plug in to the PMS of our clients, and basically we help them outsource all of their operations. So essentially, you know, we've we've had businesses we've taken on board, which used to have massive operations in London with 50 plus staff, which have essentially gone to zero through outsourcing all the operations to us. Uh, it's a business that only works with extremely high density. Obviously, managing pepper potted units around London is extremely challenging. So that's the story of you know, essentially CT Relay and Opago. At the same time, I was starting CT Relay, I always had an interest in property, and I started looking at investment and discussing with high net worth individuals how we could do investment together. And this was the launch of Lefroy. So essentially we started buying small apartments and then larger apartments and small buildings and then larger buildings. And so the journey from LeFroy really started the same way, you know, organically, I still I still own 100% of Lefroy. It's my business, and uh and I grew that uh initially from you know a few flats to now having bought, I think, you know, over 400 units uh and and and uh invested probably in excess of 300 million pounds in London real estate. And um and so that business over time started to create a lot of really nice apartments. So we bought a lot of buildings around Allscourt, Chelsea, Notting Hill, Fulham. Um, and as we started to put those apartments to rent through City Really, we felt look, City Release has all kinds of stock, right? We have beautiful houses, we have little apartments, but they're not standardized. The design is whatever the owners have as design. And so it did not make sense to mix the well-designed, all alike, all look-alike apartments from LeFroy into City Relay. So we created a new brand about a year and a half ago called Sejour. So Sejor is basically uh a customer-facing brand where we put all our nicely designed apartments on it, and um and it it's powered by City Relay and Opago in the background. So just customer-facing, but this way we have a really nice way to showcase all our apartments, and um, and it's proving successful. And we say, sure, we we're building a community angle, we're trying to make sure you know the tenants have a very special experience because we come from a hospitality background. And in the PRS sector, most actors do not, right? So we have uh very high quality service, which is quite unique in that sector, and and therefore we're able to achieve slightly higher rents, but also higher customer satisfaction. Uh, it's all very design-led, and uh, and this is the focus at the moment. We're really looking to grow the brand through our acquisition, we're doing through LeFroy, but also potentially through working with other developers to license Sejour and allow them to have Sejour block where we would advise them on the FFNE and the Finnish to be able to do those blocks. Now, Sejor is not a shortlet brand, it is uh a living brand, and the core of the activity is long leds, and and we do have midlets and corporate lets and relocations and all of that, and we do have shortlets to fill the gaps, but the core for Sejour is longer lets.

SPEAKER_00 8:12

I mean, it's quite a journey, Maxime, and I I really want to sort of ask you about all the different points along it. But that end the end bit or the end for now bit with Sejour is that, and and you, you know, we've been on a panel together at the Short Stay Show as well about but talking about that sort of move towards branded living and that bringing that hospitality thinking, that ability to create experiences and and provide something different than is typical in private rental, is something that is really growing and of interest, but also being able to do that flex bit. So, in the you know, in I guess your lease up period, being able to plug in with your short stay, because of course you've got the ability to do that with your operations and your city relay hats on, um, is something I want to get to later on in the conversation, but can we go back to that beginning of city relay because you kind of came into short stays at what might be considered sort of the golden era of short stays at sort of the beginning of the growth in um short-term rentals? You've gone through the journey and the typical journey of realizing operations is really difficult and you've mastered that and figured all of that out. But then also why maybe there is a ceiling to short stays as well. Um, and I'd love to get your kind of perspective around what you've seen in short stays, maybe in your contemporaries and in your own journey that has made you look. Firstly, you went into the operation side, then into the living side as well. So, so what are your sort of thoughts around why it's challenging in in shortlets and then moving onwards into the living part?

SPEAKER_01 10:08

Yeah, okay. So I think, I mean, first and foremost, you know, I think that business is very, very difficult, right? So growing a short stay business is extremely challenging because you have a lot of competition because there's a low barrier to entry, and your cost of acquisition of customers is quite high. So you you always spend money on ads, etc., in order to add inventory. And your return is quite high as well. So you constantly lose inventory. No, you lose inventory because also it is the nature of shortlits. People shortlett because maybe they're selling their house, it's taking more time than they thought. Maybe they move to another country for six months and they want to generate some form of income. Maybe, you know, there's all kinds of scenarios which are temporary scenarios. And therefore, you you spend a lot of money acquiring those customers who are invariably going to leave you, which is very, very difficult. So one of the one of the core challenges has been that when we started, I mean, I used to recruit my homeowners going on a small world at the time, those social media in a small world, and we in a social network, a small world, and and we used to, and I used to outreach to owners and say, hey, you should trust me, I should manage your apartment. I've got this great company and we're doing so well, etc. And so this was a start. You know, I used to go on a small world and and outreach to to random homeowners and convince them that you know CTV was was was better. It was easier at the time because it was really the start. I started in I think 2014 or 2015. It was the start of Airbnb. It was it was a lot easier to to to to start at that time. And quickly, you know, we grew the inventory, and I think a lot of uh a lot of similar businesses started around that time, you know, be it uh housed or maybe pass the keys, or maybe guest ready, or or hello guest, or you know, I don't know, there's a lot of these companies in London, I think, and they all started around the same time. It was a very nice business, right? It was good, we could scale quickly. I would say though that when you look at it 10 years after, um nobody's really scaled, right? Nobody's managed to scale that business meaningfully. Uh some people have managed to scale it somewhat by going global and you know, doing acquisition, and and but it is a super challenging business to grow. And uh and I think you know a lot of these companies had maybe three or four hundred properties in in 2016 and probably have the same amount of inventory uh now, if not less, you know, which is which is shocking, right? And and that's not to mention all the companies that have disappeared in the meantime, which are which are countless, to be honest. Uh so it is super challenging. Though everybody found new opportunities, you know, everybody's been thinking, you know, it's so tough to scale on my own. So you've you've seen all the the franchise guys, you know, either past the keys or the house. Or you know, a lot of guys have said, okay, you know why it's difficult to scale, so what I need is you know, owners who really understand the neighborhoods, you know, market real estate is local, you need to have a local understanding to scale it. So I'm gonna empower a lot of private owners to build scaled inventory of 20, 50 properties, and then I will build them a platform and I can generate revenue from that. You've seen companies like Guest Ready, thinking, look, we build great technology in house, we understand that business better than anyone, we are doers, so we really get you know the PMS world, and so we're gonna build a PMS. Uh and and so they've built rent already, and I think they they they're successful in in that way, and we're actually using rent already. So, you know, we're very happy with it.

SPEAKER_00 14:16

You've had companies like uh I've had Alex on the podcast previously. Okay, great.

SPEAKER_01 14:21

Yeah, yeah. You've had companies like uh Under the Dormat, you know, where okay, let's own the distribution side, let's try to find ways to distribute properties better, let's even own a channel and let's build Ospiria, and let's be so everybody's trying to do their own thing. I mean, we decided look, uh, we've built great operations, we're tech-enabled operations, let's go all in on operations and let's build Opa. So you I think you know, in that industry, most of the survivors have pivoted in a way and found new ways to generate income because the traditional business idea has proven too difficult to deliver. And I think that's what we're doing. And and you know, yeah, we have lots of brands, etc. But they all they all live together and they all come from the same ideas, you know, and then even Sejour is kind of like, okay, well, shortlets are difficult, but we know how to do lettings, we know how to do it better. We're gonna do séjour and we we're gonna focus on building you know long, meat, and shortlet and make it flexible living with a community angle and a branded living. And you know, if you put that together, you know, you're you're just leveraging your skills to do something slightly different that feels better aligned in the market. And I think you know, you live in a world where the lifespan of companies is getting shorter and shorter and shorter and shorter, and if you don't pivot, you die. So you need to constantly keep looking at trends and understanding what works to try to change the way you work and attract different types of customers and speak their language, etc. So it is key to survival, I think. And if we had all just done what we were doing and just keep doing what you're doing, you know, it we it wouldn't work.

SPEAKER_00 16:06

Adapt or die is the the thing here. But with moving, so with Sejure and moving into the the branded residence, the branded living, what were you seeing in the market that made you think, aha, this is where I want to head?

SPEAKER_01 16:24

Well, you're seeing a lot of the growth of the BTR space, so it's a branded living type, and you're seeing a lot of the growth of the co-living space. Obviously, uh the PBSA space has been here for a long time, but lots of brands. So branded living has become more and more common. The hotalization or the growth of hospitality within the resist sector has also grown, and expectations of tenants are continuously rising. And so we saw a trend where you know demand is really high in terms of what tenants expect, but we saw a PRS market that had not really adapted. And so when you think of rentals and you go on right move and Zupla or whatever, and you look at apartments, you know, you don't know what you're gonna get. You know, it's a there's no there's no design, there's no, you know, so there's a lack of branded proposition in the traditional rental sector. A lot of the you know, a lot of the PBSA, RBTR, Oracle Living, or whatever are usually purpose-built and usually outside of the best neighborhood. And we thought there's an opportunity that we can, you know, obviously we're not going to be amenitized like them because we don't have purpose-built building with beautiful gyms and spy and all the rest, etc. But we are in the best neighborhoods of London. We're in Nottingh, we're in Chelsea, in South Kensington, in you know, in Mayfair, in Bayswater, in all those areas which are amazing and have the best amenities in the neighborhood, right? So do you prefer to live in zone three and you got a great gym and a great spa and whatever in your building and your co-working? Or you prefer to live in superprime London and of course you've got your gym next door, your whatever next door. And so we're trying to build partnerships with all those local businesses to make sure that our tenants can benefit from those amenities at reduced cost. Those local businesses are very excited to get those clients because those clients are high-paying renters with disposable income, which can become customers of their business. And um and we can build a really nice branded proposition for tenants. And your focus has been mostly micro-living, apartments ranging from 20 to 30 square meters. Usually we're targeting very young tenants, first time in the city, uh, sometimes students, sometimes young professionals. Uh, they want what are they seeking with us? You know, they want convenience, they want to make friends, so they want to arrive in the city and uh find ways to have some kind of community. Uh and and and they want a very nicely uh nice living experience, right? They want a good landlord who's gonna take care of them, they want to have nice furnishings in the apartment, and they value flexibility. And we tend to be very flexible, right? We we are because we come from that background, you know, for us it's okay changing tenants. I mean, that's what we do. Uh so we get that. I would say, however, that probably the average tenancy at Sejure is you know, 12 to 18 months, probably trending towards 18 months, you know. So it is not definitely not a short stay proposition. But by having short stays, understand short stays, if a tenant was to vacate tomorrow and another tenant was to move in in a month, well, we we know how to monetize that we're so we are better equipped to achieve higher revenue.

SPEAKER_00 20:15

So also really well placed for the Renters Rights Act as well, which allows that flexibility from the tenant side that maybe the rest of private rental, it's a bit of a shock, you know, to not have those security of year, you know, 12-month leases. But for you, you're kind of coming in. Well, kind of expect that. We know how to do that, and then we know how to make money if there is a a gap within tenancies as well.

SPEAKER_01 20:41

Yeah. I don't I look, I I think that whole tenant reform act at this stage. I can't, it's hard to understand the impact it will have. I think I don't expect a lot of tenants to game the system. Maybe students will game the system because you know they they move a lot and they're going for terms, and you know, might as well game it if you're gonna come in for four months and you're gonna say you take a long let, so you don't pay the premium to have a medium let and then you give your notice after two months. I don't know. Maybe that maybe we'll see that type of behavior. But you know, usually when you rent a flat, you know, I think you're you're coming in for, you know, it's a big decision, you're moving with your stuff, you know. I think moving around is not is not, you know, it's not fun.

SPEAKER_00 21:23

Yeah. Yesterday I was actually at a build-to-rent conference, the BizNow one, and I was moderating a panel. And and the first question we asked, because we had uh Granger on, we had JLL, um, a couple of other um build-to-rent people on the on the panel. But the first question was around, you know, the impact we're five weeks into the renters' rights. And they kind of said very similar to you, like it actually hasn't really had any impact except for students, you know, mucking about a little bit or or you know, chancing their arm a little bit. Um, I just I want to ask a question though, on Sejan. It sounds like. Is it like would you consider your um like the product, if you like, as co-living? Like, is it more like a co-living brand, do you think?

SPEAKER_01 22:11

I I don't consider it co-living, though I would say co-living tend to be doing all kinds of things, you know. I mean, our buildings are basically self-contained apartments, the buildings they don't share any facility. So, in no way are they co-living. So there's a community angle that we're trying to develop, and we want tenants to refer other tenants and to build a community, and we're trying to create activities and things that link them together and make them have a great experience. Uh, I would not call us co-living, but yeah, I mean, I've seen co-living operators take blocks that are exactly identical to what seizure blocks are. So, what is co-living? You know, I mean, yeah, that's another debate.

SPEAKER_00 22:55

Yeah, no, that's an interesting one because that co-living term is used fairly loosely for perhaps in in some kind of assets or product types. But I thought it was really interesting when you were talking about because kind of you know, the build to rent, purpose-built, BTR, is you know, like I was going to ask you about whether you saw that as a competitor to yourself. But I think the fact that you really stress there is you've got the location that BTR typically doesn't have. They're usually, you know, they're in places maybe like Wembley or um Croydon or wherever, maybe in within London, rather than right in the centre, which is what you've been able to do. But because of the way buildings are that you're getting, you know, they're not purpose-built. They're they're older buildings that have perhaps been repurposed or just referved. You can't necessarily have that offering that build-to-rent might have, which is gyms and pose spaces and and that. But you can offer something better, which is, or maybe not something better, but you can offer the the actual location that you have and building those connections with other businesses or facilities, amenities within your area. So actually, in effect, offering the same thing, just a little bit more dispersed, perhaps, than what BTR is doing.

SPEAKER_01 24:22

Um yeah, that's right. It's exactly the main difference. I think from a business perspective, as well, you know, our operating expenses are very low compared to what BTR would be. So we we see our asset class a bit more attractive because obviously the cost of running BTRs with, you know, we mostly don't have even have lifts or anything to service. You know, we uh we have a weekly communal and a window cleaning, and you know, I mean you're your very basic services that you need in those kinds of blocks. Whereas if you need to activate a BTR with receptions and gyms and cinemas and dining rooms and all kinds of things, you know, your cost of running those assets are extremely high. And I also feel like we're playing into scarcity, right? There is no, you know, the the assets we own cannot be replicated, you cannot build in the areas we're in, you know, conservation area is very protective of the building. So we like that scarcity angle where you know there is nothing nothing new, shiny is gonna come. There's not the next new shiny block, you know, where you might be, you know, if you're in Croydon and you've got this nice BTR, and probably the next BTR will be better amenities and then cooler uh entrance or whatever, and it will be replaced, you know, and your stock might look cool. This is not gonna happen to our stock.

SPEAKER_00 25:53

Yeah, yeah, because it's unique. You know, you've got your your buildings are unique. I want to ask you about community because you've mentioned about you know aiming to build a community for your residents. How are you doing that? Like, are you using technology like an app for that, or is it just sort of kind of cultural that you're doing within it? Like, what are the sort of things that you're doing to build that community for your residents?

SPEAKER_01 26:17

Yeah, so it's mostly um, so I say I mentioned the partnerships with the local businesses, so make sure they go into those businesses, and then um we have uh a GM for the brand who's in charge of organizing activities, it could be uh a gym class offered, it could be uh a reading club, it could be uh, you know, all kinds of activities that will engage with the community. I think there's a welcome for new residents, uh welcome coffee, there's a run, uh, you know, all little activities that we'll paddle.

SPEAKER_00 26:50

Is there a paddle?

SPEAKER_01 26:51

Yeah, I I love paddle, yeah.

SPEAKER_00 26:53

Yeah, yeah, no, we we play, I've played against it. Yeah, it was it was uh I want to say horrifying because you were so good, but it was a lot of fun.

SPEAKER_01 27:02

It is fun, it is fun. But yeah, typically, you know, going to social paddle club and having you know a good paddle game in old score or whatever. These are the kind of activities that you know, and you know, you don't want to overcrowd it, right? Because you know, people want to live their own life. You know, you're in London, a big city, you have your own life, etc. But I think it's nice to have you know that that monthly event where you can see each other, you know, maybe a biannual dinner, and you know, a few things that will make you meet the neighbors and and make sure you know you have a friend because big cities can be lonely. You know, I think that's why you've seen the big rise in co-living and and all those types of propositions, is mostly to fight, you know, loneliness.

SPEAKER_00 27:46

Yeah. And it's also creating that stickiness, isn't it? That sort of stickiness. So there isn't the churn, they're not, you know, you you have more loyalty to a building, which is one of the topics we talked about in this panel that I was moderating yesterday, is around creating community, creating relationships within a building so that there is less churn and there's more stickiness.

SPEAKER_01 28:09

100%, you know, and in our panel we had discussed this and we and and I had mentioned, you know, co-habs where I had a dinner, I had a lunch with co-habs, and uh and I remember chatting about about the brand, what they're doing, you know, and he was telling me, you know, how much you know wait time and and uh referral and retention they were getting through those communities where people really belonged, you know. I think the co-living, these are real co-living where actually they really live. I mean, you call it like almost uh you know, flatmates, you know, type type arrangement, which is quite cool, you know, because people really want to belong to that community. And there's almost like a waiting list to be able to come into that little community. I was really impressed when speaking with co-hobs uh uh about that. So you're 100% right, you know, the retention and the referral angle are very, very, very important.

SPEAKER_00 28:59

Yeah, it's like having flatmates, but you don't have to argue about who hasn't done the washing up, and you can like completely shut your door on them. Um, Maxime, I I want to talk to you a bit more about hospitality, and then what do you think you bring to the living, to your seizure, um you know, and and the living, you know, the living product, if you like, from your hospitality? What is it that you bring that perhaps traditional built to BTR, traditional private rental? And obviously they're very different, traditional BTR and private rental, but what do you think it is that you're bringing that's unique and special, or knowledge, or just culture, or or or whatever it is that you're bringing that's helping you with Sejure?

SPEAKER_01 29:48

Yeah, I think I mean, look, we're we're very design-led. So we're bringing something that is really, you know, thought carefully about in terms of design. Then, you know, the way you arrive in the apartment, you know, when you got a rental, you don't you don't get anything. This you get a welcome box, you get a candle, you get uh, you know, you so you you you're you're taken care of as a guest, not as a tenant, you know, and and so you know, customer is king, and customer is king, you know, applies to that business as well. So, you know, we we're very much listening to what tenants want. We ask them their opinion, what would they like more of? You know, we're very it's kind of this relationship where we're really pleasing, trying to please them just the same way you would do in the short-led sectors. The other thing is, you know, when you think about response time, you know, in the long, you've got you've got a problem, you know, you're renting a flat long lead. You might wait days, you know, you might wait weeks, you know, and so we are used to responding minutes, hours. But you know, it's a it's a different world because you know, when you've got a guest staying for three days, you can't make him wait a day. You're gonna you're gonna get killed. So we come from that world of reviews, that world where you can't mess up. And and that's a completely different background where you know the the long-let world does no reviews, right? You you it's okay, you know, you you're just uh you're just a tenant and you take it, yeah, and and and we're not like that. So I think it plays a major part in terms of the experience, and I hope our residents you know feels that way, that we're really caring, and and you know, uh our GM, you know, for Seju is coming from a hospitality background. You know, she's she has always worked in a hotel, she understands exactly what hotel expectations are, and she's delivering that in the PRS space. So yeah, this is this is this is how I think we differ and deliver hospitality.

SPEAKER_00 31:51

And it's it's really putting the customer at the heart of the relationship, isn't it? In a in a way that perhaps traditional built-a rent might put the asset investor owner at the heart of the relationship rather than the than than the actual person using. I think that's gonna that's changing though, because with the Renters Right Act, because of the law, the customer is going far more at needing to be at the center because it is about creating, you know, making sure it is a place they want to stay. Um the other thing is in in private rental, well, maybe not private rental, but bill to rent, is that the the um being a hostage to reviews, which you're very used to doing, coming more and more with like home views and um review sites within that sector as well. So it's a bit of a rude awakening, I think, which is something though that you're very used to. You live or die by your reviews, you know, on Airbnb or Booking.com. Um, but that is probably coming more to the bill-to-rent sectors um and the living sectors, yeah.

SPEAKER_01 33:07

And it would make sense, right? I think it would make sense that you know what you're getting into when you rent an apartment. I've seen a lot of business concepts around, you know, you should be able to rate your landlord, rate, you know, you should go both ways, you know, you should rate your tenants. Great tenant, rate your landlord. And I totally, I totally see that, you know. I mean, it makes a lot of sense. You know, it's a it's a contractual relationship, you know, and you you're gonna you know leave for a year, and if if the landlord doesn't want to fix anything when you live there, it's gonna be a disaster. And if the tenant is partying all the time and breaking everything, it's a disaster as well. You know, and it it would be good to you know introduce the same type of feedback loop that you see in the hospitality sector to the rese sector, because obviously a lot of landlords historically have been abusive. Though I would say it's changing a lot, and you see that you know, buy-to-let landlord, uh demographic evolving, with all those professional landlords exiting the market, and now the real, you know, more institutional landlords coming in, where I think, in a way, you know, probably better landlords because they care more as well about building brands, long-term relationship. It's not just driven on a short-term basis, but it really matters because you know, building that brand will yield you know better rents, uh direct bookings, you know, and all kinds of things.

SPEAKER_00 34:37

And so when it comes to yield and return on investment, how are you seeing shortstays from that business compared to the branded living?

SPEAKER_01 34:48

Yeah, I mean, I would say for what we're doing, you know, the the yields are similar for a lot less uh work, you know. So the other thing is obviously you cannot do shortlits more than 90 days. So, you know, unless you've got a C1 license. So shortlets is not really a year-long business proposition. So I think shortlits serve a purpose, you know, as I said, you know, filling a void uh after a longer tenancy or all kinds of things. But you know, is this there is no real business in shortlett unless you own a C1 block, and those blocks are C3 blocks, so they are residential blocks, and they serve that purpose to have residents who live in the city. So this is this is you know, this is the way we operate them. Uh, in terms of operating expenses, it's obviously a lot lighter to do longer lets than short lets. Uh, and and so yeah, we're very happy with the yields we can achieve. Uh, and we hope, you know, the key to success for us is to try to compete outside of the market. So, you know, PRS usually rent their apartments on right move and Zuplan and the market, etc. If we can find a way to attract tenants directly, we don't need to compete with the rest of the stock. We live in our own world, and we've seen that a lot in the BTR sector, you know, with you know uh Gray Star trying to bring build brands like uh Bloom or Quintane living, going having ads all over the city. Why are they doing that, right? Why are these BTR guys spending all this money building brands? They're doing it because they don't want to they they want to show that what they're offering is differentiated. They don't want to compete with the Zupla and right move apartment because it's not the same. And if you manage to do that, you can achieve higher rents, and you can achieve higher rents, you get better yields, etc. So this is this is the the thinking as well with Sejure. We want to find ways to compete outside of that core market.

SPEAKER_00 37:05

And is there anything that you've had to really learn and learn fast that you didn't know before you came into doing the branded residence?

SPEAKER_01 37:16

Yeah, I think you know, I mean, you know, my life has been, you know, learning by doing, right? You know, just to do the things and then you learn about it while you do it. You know, don't overthink it, do it and then see what happens, and then you know, learn along the way. You know, I think we learn things all the time, right? You know, when I see a developer, you know, I was really impressed. There's a developer around the corner with done a uh student housing, a developer is called SAV, the block is called 51, and they're achieving those really high rents. And I'm like, wow, how do you achieve those rents? And then you know, I try to understand the model. Does they attract all these Asian students? What is it doing? So you keep on learning, you know, you keep on learning what successful schemes around you are doing, and uh and try to emulate and try to find ways to attract similar customers by offering you know uh you know special offering. And I think you know they do it by because uh they offer comfort to parents that you know there's gonna be security, the the kids are gonna be picked up from the airport, uh friends, you know, and these are the things that make a huge difference for parents, and they've managed to do that very successfully. So yeah, so we keep looking at you know things around the corner, right and left, what are people doing, and um and try to integrate it in our business plan.

SPEAKER_00 38:40

And then in your business plan, what's your growth plan? So if we talked at the beginning of this around how there's there's a limit to the ability to scale in shortlets, but how do you see that now with your Sejure brand? What's the future for you? What are you working towards?

SPEAKER_01 38:57

Yeah, I think this is the beauty of it, right? There's no limit. I mean, in terms of, you know, could I, you know, we run, I think 150 live right now on Sejour. We'll probably have 300 by year, and uh probably 400, 450 by by next year. But could we have 3,000? Yes. And 3,000 would be, you know, definitely way above a billion pound portfolio, maybe a couple billion pound portfolio. So 100% we can do it. 100% there's enough depth in London. You know, I often get asked, you know, what about uh other cities, what about other countries? Why did you why are you in London? Well, you know, everybody's gone everywhere. And I've I thought, you know, you can do you can go all around, you can go, you know, uh horizontal or you can go vertical, you know. And I've we've chosen to go vertical and to own the whole chain of value, you know, from from acquiring to developing to managing and you know, operating and down to the down to the FM side of things, so actually cleaning and maintenance and and everything. And I think London has enough depth to have thousands of sejor units. I mean, when you think of you know BTR developments, large BTR developments might have 500 units in a single block. It could be it could be a satellite, and we do look at Sejure with other developers coming to market with stock. We're currently looking at one in basewater, where basically a developer has bought a building and it's got about 20 or 30 units. Though yeah, we we like to invest with our LPs and look at opportunities. We have a lot of experience in investment and development, having realized you know, real estate in London has been hammered. Uh, it's been 12 years going down. Uh, peak was in 2014. It doesn't look like it's gonna get any better this year, and probably it won't recover next year. So you're in a market where you want to be buying stock because what what's been happening? You know, you've you've seen the prices go down by maybe 25, 30, 35 percent over 12 years, but then in front of it, you've seen rents rising. So, what does it mean? It means just yields keep improving, and you can buy assets in London now, maybe yielding 6% with good reversion, achieving 7 to 8% yield, you know, which you which is unheard of for a prime London uh raising asset. So yeah, uh my view is we should be buying, buying a lot more. Obviously, uh our resources are very limited, so we need to work with you know LPs who have you know funding capabilities, and uh and we're looking to acquire a lot over the next two, three years and take advantage of this market where you know a lot of the landlords are exiting, but the market is very attractive. Obviously, taxation and you know operating expenses are are have to be managed, but yeah, it is it is an attractive market.

SPEAKER_00 42:07

And do you find it easy to communicate that to investor partners, or are you still sort of trying or are you kind of trying to convince them of the opportunity? Because it is a relatively still relatively new kind of way of looking at assets, isn't it?

SPEAKER_01 42:23

Yeah, I mean you're seeing a shift, right? A lot of the you know, commercial, retail, office investors are shifting a lot of the assets into the living sector. So you see that institutional shift towards living. Um so it's not really about the convincing. I think everybody I mean, a lot of investors like living and rezi in London. I think it's an attractive asset class. I mean, the problem is to match their return expectations with the reality of the market. And obviously, that you know, if people are chasing 15% net net IRRs uh in prime RAZI London, well, it's not gonna work. You know, it's just not gonna work. So I think it's important to find the right capital to match with the opportunity, and this is probably the challenge that we face when we speak to investors. You know, you shouldn't be looking, you know, if you're doing uh regional industrial assets, it's not the same thing as doing superprime Ray London, you know, and I I think it's important that you know the the return profile you know is aligned with the the investors we choose. But yeah, I think uh overall the opportunity is attractive to a lot of investors.

SPEAKER_00 43:44

Great, Maxime. On that note, we will finish up. Thank you so much for sharing all your knowledge and also your what you're doing now as well, and your insights. So, thank you very much for joining me on a Pillow Talk Sessions podcast.

SPEAKER_01 44:00

Thanks, Jessica. Take care.