Most cleaning companies choose markets by sector label.
Office cleaning. Retail. Industrial. Education. Healthcare.
That’s useful. But it’s not enough.
My approach is to start with the operating burden, not the sector label.
What does the client actually have to manage?
Who has residents living in buildings at scale?
Do they have communal areas that affect complaints, reviews, and perception?
Who has a professional management layer?
Who buys centrally?
Who is under rising pressure to prove building standards are being managed properly?
Looking at it that way, co-living, housing associations, build-to-rent, purpose-built student accommodation, and retirement living are no longer five unrelated markets.
They look like one client wearing five labels.
That’s the first-principles version of my target market.
Not one sector.
One operating profile.
The mistake is defining the market by the label
Most markets are labelled from the outside.
Co-living. Housing associations. BTR. PBSA. Retirement living.
Those labels are useful shorthand. They’re not the best starting point for strategy.
A co-living operator does not describe itself as a housing association. A PBSA provider does not sound like a retirement living group. A BTR fund has different investors, a different language, and a different customer promise.
On paper, they’re separate verticals.
Operationally, there’s a lot of overlap.
They all:
Manage people living in buildings at scale
Own shared areas that affect the resident experience
Have someone responsible for cleanliness, safety, building condition, and perception
Buy through some form of procurement process
Face rising regulatory, investor, or reputational pressure
That’s the part I care about.
The mistake is defining the market by what the client calls themselves.
I’m interested in what they have to manage.
The actual client profile
The client I’m looking for has six characteristics. Strip away the labels, and the profile becomes clear.
1. Volume
There needs to be enough stock under management to justify recurring soft FM spend.
That might be units, beds, schemes, blocks, or estates.
The language changes by sector. The principle does not.
More residents means more shared use, more wear, more service demand, and more pressure on standards.
One small block is a job.
A managed portfolio is a market.
2. Professional management
I’m not targeting fragmented private landlords or generic office cleaning. They’re too obvious.
In professionally managed residential buildings, cleaning isn’t just a facilities line. It affects complaints, residents' experiences, reviews, renewals, perceptions of service charges, and building standards. It acts as the evidence trail for how the asset is being managed.
That’s a more interesting client. They have a management layer:
Someone owns the budget.
Someone deals with procurement.
Someone cares about compliance.
Someone is accountable for resident outcomes, building condition, investor reporting, or service delivery.
Professional customers don’t buy cleaning the same way.
They do not just ask:
“Can you clean this building?”
They ask:
Can you provide evidence of the work?
Can you mobilise properly?
Can you report against agreed standards?
Can you reduce complaints?
Can you operate without creating more management burden?
That’s a different sale.
3. Transient or captive occupancy
The resident profile varies, but the operating problem is similar.
Students churn. Co-living residents churn.
BTR tenants renew or leave, in part, based on their experience.
Housing association tenants may be long-term, but landlords are under direct pressure on tenant outcomes.
Retirement living residents may be more settled, but the building environment matters more. The residents are older and more dependent on communal standards.
Transient residents create turnover pressure.
Captive or long-term residents create service pressure.
Either way, the building has to work.
4. Communal areas are central to the product
This is the biggest filter.
If communal areas don’t matter, soft FM is easier to commoditise.
In these five markets, communal areas are not incidental. They’re part of the product.
Reception areas. Corridors. Lifts. Shared kitchens. Lounges. Gyms. Study areas. Bin stores. External areas. Amenity spaces.
These are the parts of the building residents see every day.
They shape reviews, complaints, renewals, perceptions of service charges, and the operator’s reputation.
A dirty lift lobby isn’t just a cleaning issue. It becomes a complaint, a bad review and a service charge dispute.
That’s a signal.
5. Regulatory or investor accountability
This is where the market has changed.
More scrutiny, more evidence, more accountability.
The Building Safety Act, fire safety expectations, Decent Homes, Awaab’s Law, HMO licensing, ESG reporting, university partnership expectations, and retirement living regulation all point the same way.
I am not saying cleaning solves those obligations.
It doesn’t.
But in multi-occupancy residential buildings, soft FM sits inside the operating evidence trail.
Cleaning schedules, inspection logs, waste processes, issue reporting, and escalation routes show that the building is being managed with control.
That’s a stronger buying reason than clean floors.
6. Centralised procurement
This is the commercial filter.
The opportunity only works if contracts can be won at the building, regional, or portfolio level.
Door-to-door sales don’t work here.
The client needs a procurement structure that awards recurring work.
The sweet spot sits between the two. Not locked into a national framework, and not large enough to have built a direct labour organisation.
Enough stock to justify a recurring contract. Enough autonomy to choose who delivers it.
One client, five labels
Once you use that filter, the five target markets make more sense.
Different labels.
Same operating profile.
That’s why I don’t see these as five separate sectors.
I see them as five versions of the same ideal client profile (ICP).
The opportunity should be framed by stock, not hype
I’m cautious with market sizing.
It’s easy to make the market look bigger than it is. Take a service cost, multiply it by a huge stock number, and you get a nice-looking TAM.
That doesn’t mean much.
You can’t calculate the exact addressable market from stock figures alone. But the scale of managed residential stock is clear:
The Regulator of Social Housing reports 4.5 million social housing units owned by registered providers in England as at 31 March 2025.
Knight Frank’s Q3 2025 UK BTR Market Update reports 153,367 complete homes, up 25% year-on-year, with a further 54,354 under construction. The sector is on course to exceed 200,000 operational homes within the next few years.
CBRE’s 2025 UK Real Estate Market Outlook estimates a shortfall of c.620,000 student beds across the UK. Only 50,000 beds are forecast to be delivered over the next five years, concentrated in cities hosting Russell Group universities.
Knight Frank’s Co-Living Report 2024 records 5,600 operational co-living homes in London alone — 59% of the UK’s total complete and pipeline stock — with a further 6,700 homes in the London pipeline. UK-wide, supply is on course to triple to more than 20,000 beds by 2027.
Knight Frank’s Seniors Housing Trading Performance Review (November 2025) reports just 8,747 new purpose-designed seniors homes expected to be built in 2025 — up from 7,000 the previous year, but still 11% below the sector peak of nearly 10,000 in 2016. Independent reviews suggest the UK needs to build up to 50,000 specialist homes for older people every year. By 2040, a quarter of the UK population will be aged 65 or above.
These numbers do not mean every unit is addressable.
Some operators will insource. Some buildings already have long-term FM arrangements. Some contracts will be too large, too small, low-margin, or simply wrong work.
That’s fine.
The point is not that every unit is available.
The point is that these are large pools of professionally managed residential stock. This is where communal standards, procurement discipline, and compliance pressure matter.
That’s enough to build around.
Why this matters for an SME cleaning operator
This is where my acquisition thesis comes in.
I’m not trying to buy a small cleaning company and pretend it’s already a national FM platform.
The approach is more grounded.
Buy boring, cash-generating SME cleaning businesses with real delivery capability.
Focus on larger residential clients with compliance expectations and professional procurement.
Win long-term contracts to improve revenue quality and exit value.
Cleaning is the wedge.
Not the platform.
The expansion opportunity is simple. Sell more of what the same customer already needs.
Grounds maintenance.
Waste.
External cleaning.
Planned communal area upkeep.
Land with cleaning.
Prove reliability.
Add the next service line. Stop chasing new clients. Capture more from the ones you already have.
Over time, the business moves from a single-service cleaning contractor to a multi-service soft FM partner.
Same buildings.
Same buyers.
Better revenue quality.
Why not office cleaning?
Plenty of good businesses do.
But generic office cleaning can become a race around the wrong variables.
Hourly rate. Lowest quote. Founder relationship. Loose specification. Weak reporting.
Contracts that look fine on revenue and poor on contribution.
No clear reason for the client to care beyond price and reliability.
The residential markets I am looking at create a different buying reason.
The customer is not only buying a cleaner.
They are buying fewer complaints, better evidence, safer communal spaces, defensible service charges, and a better resident experience.
That gives the right SME operator a cleaner direction:
Fewer random contracts.
More repeatable customers.
Better revenue quality.
The sweet spot
The sweet spot is not the biggest possible client.
At the top end, large operators can build internal teams, run DLOs, or use national FM providers.
Some have procurement departments that make it hard for an SME to compete.
Others need balance sheet strength, geographic coverage, or accreditations that a smaller operator doesn’t have.
That’s not where I’m starting.
The more interesting band is below that.
Large enough to have a recurring need.
Small enough to still value responsiveness, local density, senior attention, and specialist understanding.
For example:
a regional BTR owner-operator with a handful of schemes
a PBSA operator with one or two sites in a target geography
a retirement living group with several schemes
a housing association with geographically concentrated stock
a co-living operator scaling from early sites into a larger portfolio
That is where an SME operator can build credibility.
Then expand.
This is a revenue quality thesis
The reason this matters isn’t just revenue.
It is revenue quality.
A cleaning company with lots of small, unspecified, price-sensitive contracts is valued differently from a specialist operator with stronger client concentration, better documentation, multi-year agreements, sector positioning, and evidence of its ability to serve professional property customers.
The work might look similar, but the business isn’t the same.
That’s the bet.
Buy boring, cash-generating cleaning businesses.
Focus them over time on larger residential clients with long-term contracts and compliance expectations.
Improve revenue quality and exit value.
That does not happen with a new logo.
It happens when changing the operating system at work.
Your next move
Do not start with the sector label. Start with the operating problem.
Who manages lots of residents?
Who has communal areas that matter?
Who has a professional management layer?
Who faces rising scrutiny?
Who buys through centralised procurement?
Who has enough scale to need support, but not so much that insourcing is the obvious answer?
That filter leads me to five markets.
Co-living. Housing associations. BTR. PBSA. Retirement living.
One operating problem.
Five sector labels.
The label is a map someone else drew.
The operating problem is the territory.
Start with the territory.
That’s all for this week.
Matt Harris
The Growth Lab
The Growth Lab newsletter is a playbook for buy-and-build by Soft FM operators. Deals, growth, operations — no theory, no fluff. Subscribe for the next one.
Growth Lab Capital is actively looking at Soft FM businesses across London, the Home Counties, the Midlands and the South East. If you’re an operator thinking about what comes next — even if it’s a few years away — I’m happy to have a conversation. No broker. No pressure. Book a time here.
💼 Daily on LinkedIn — Soft FM buy-and-build, deals, and market intel across FM, housing associations, and construction. 4,000+ follow. Join them here.
𝕏 Building this in public on X. Soft FM. Buy & Build. Same operator, less polish. Follow here.