What BTR can learn from transforming a landmark hotel into an Aparthotel

Case study looking into how Build to Rent can learn from the transformation of a landmark development in Birmingham, into an Aparthotel.

CGI image of the Birmingham-based Aparthotel by Swicth and SevenCapital | BTR News
CGI image of the Birmingham-based Aparthotel by Swicth and SevenCapital.

In the heart of Birmingham city centre sits the Royal Angus Hotel, which was due to become a Doubletree by Hilton hotel. Halfway through construction, the development was acquired, and Switch was tasked with reviewing the hotel’s feasibility.

This case study looks at the opportunity presented, the process of bringing the vision to life, the ‘Switch process’, and the full asset strategy.

The Opportunity

Located in Snowhill, at the heart of Birmingham’s city centre, the Royal Angus Hotel was acquired by SevenCapital in 2021 when it was halfway through a construction project to become a 188-bedroom Doubletree Hotel by Hilton.

Switch was asked to consult on the project and review the hotel’s feasibility, using its existing expertise in hospitality and asset management.

An opportunity was immediately identified in the Aparthotel market, with only 7% of Birmingham’s hotel rooms offering apartment spaces, the largest of which was over eight years old.

Switch drew up a new feasibility, which changed the overall direction of the property to developing Aparthotel Birmingham Snowhill.

Aparthotel lobby | BTR News

Bringing the Vision to Life

In mid-2021, Switch began working with SevenCapital and architects The Building Design Group to re-design the hotel, with the principal objective being to maximise the asset value with minimal loss of bedrooms.

The original design included:

  • 188 bedrooms.
  • Restaurant, bar and lounge, and an external terrace on the third floor.
  • Meeting space.
  • Hotel reception when the main entrance was on the ground floor.

However, the definition of an ‘Aparthotel’ is a longer stay model, meaning the requirement for meeting rooms and F&B facilities would actually be limited.

In Switch’s  experience, hotel restaurants in the city centre always struggle when they are within walking distance of every restaurant offer that a customer could want. It was also clear that the third floor of the hotel had some of the best features, including full size windows and the external terrace. 

By removing the third floor facilities, 38 additional apartments could be created, 18 of which would have external gardens. The re-design also meant the reception and lounge areas were moved to the ground floor.

This strategy allowed the hotel to offer 161 fully-fitted apartments with lounges and kitchens, with the smallest starting at 26m2, without making any changes to the overall building footprint.

Switch also challenged the standard of having a restaurant that operates for breakfast, which would likely sit empty at other key times in the day. Given the client demographic, this development will be the first Aparthotel to have a convenience store and bakery on-site, where guests can not only collect a ‘grab and go’ breakfast, but can also purchase whatever they require from the store, when they need it.

Switch believes that this will be the new standard for Aparthotels and Build to Rent developments.

“Our experience across hospitality means that taking an agile and solutions-driven approach comes natural to us. We’re brave enough to challenge the norm to ensure every square metre of an asset is being utilised to its full potential, resulting in maximum returns for our clients. We offer developers a unique blend of experience between hospitality, aparthotels, Build to Rent, Co-Living, PRS and student developments and serviced offices, all underpinned by award-winning, hotel level services. 

“The team’s commerciality and entrepreneurialism ensures that every development is seen as their own, and rather than following a standard system to achieve moderate results, we go one step further to maximise returns. Aparthotel Birmingham is the perfect example of this. By involving Switch at the very beginning of the project, SevenCapital was able to think bigger than the traditional hotel format that was originally intended for the asset, and ensure that it was modern, adaptable and offered multiple revenue streams. SevenCapital is now reaping the rewards, with a development that is on time and in budget, with a stronger feasibility than before. It also has an operator that understands every inch of the development and is invested in the profitability via a commercial lease.”

John Angus, Managing Director (MD), Switch
Aparthotel lobby | BTR News

The Switch Process

Switch consultancy works in distinct phases, allowing the development owner to have a clear pathway:

1. Pre-Planning and Initial Feasibility

For the Royal Angus Hotel, Switch completed the massing drawing review and five-year financial feasibility, and developed the design in preparation for the re-planning discussions.

Acting on behalf of the owner, every client project is seen as its own, ensuring that all spends had a clear return.

2. Post Planning

Working on the project development as part of the design team, Switch utilised its hotel and apartment experience to ensure the asset layout and apartment designs offered the perfect balance for future guests.

This process involved:

  • Research: By completing a brand search with Accor, Marriot, Hilton and IHG Hotels, the owner had full confidence in the financial feasibility and desirability of the site. The recommendation was to remain independent, due to Switch’s current presence in the city, and the company’s firm belief that there could be a successful alternative F&B presence as part of an Aparthotel. Various Client Advisory Panels also meant that Switch had established clear client feedback, continually updating the financial feasibility throughout the development process.
  • Planning: Service and Back of House areas are often left to the last minute, but at an early stage, Switch recognised the operational challenges posed by the uphill structure of the building, which meant that half of the ground floor was below, and half above, ground level. This early intervention meant that the risk of later delays and additional costs were mitigated.
  • Collaboration: By working with a recommended supplier at the early stages of the design development, Switch had clear cost certainty for the project. To provide the ultimate flexibility for guests, the company also worked closely with the design team to create a variety of stay options, resulting in nine apartment sizes and multiple variations to include connecting rooms.
  • Experience: With four successful hotels in Birmingham, Switch had access to a number of managers who they consulted with at various stages of the design. The company’s facilities manager was also involved in the construction, to ensure that there would be a smooth handover when the hotel opens, and Switch’s marketing team conducted a full review of the original ‘Royal Angus’ name, resulting in the decision to change the name, launching it as ‘Aparthotel Birmingham Snowhill’.
Lobby | BTR News

3. 12 Months Pre-Opening

The breadth of Switch’s team’s experience ensured that a full asset strategy was in place from the outset, from branding to operations and facilities management.

  • Commercial Planning
    • The marketing team completed the website, social media profiles, and oversaw the production of CGIs and drone imagery.
    • From the initial site launch, the sales team set up individual tours and negotiations with a variety of client prospects, using Switch’s established and ever-growing database.
    • Direct booking systems and an online reservations platform have been fully established to ensure a smooth booking process and the successful operation of the hotel from immediate launch.
    • Switch’s central reservations team has the hotel loaded onto their systems.
    • The Yield platform is also in place, so that the commercial director and team can always achieve a competitive rate.
  • Operations
    • Switch’s established procurement system ensures it can access reputable suppliers, whilst a sample sign off and purchasing plan offers the best value.
    • The Switch delivery procedure means each apartment has a box filled with items, which is delivered to each room, ready to be unpacked.
    • All staff are trained at Switch’s Park Regis Birmingham headquarters – voted as the UK’s Best Hotel. Regional teams open all hotels, and a general manager will be appointed post-opening.
  • Engineering and Health & Safety
    • Switch’s external provider, Shield Health & Safety, has set up the development’s Health & Safety facilities.
    • The group facilities manager works with all current suppliers and contractors, to ensure they are ready to take over the hotel from opening, so there is a smooth handover.
Aparthotel lobby area | BTR News

Aparthotel Birmingham Snowhill is set to open in late 2023, and in true Switch fashion, the company has agreed to take the hotel on a 15-year lease with a further five year option, which will be based upon the updated financial feasibility. This lease provided certainty for the developer to secure the final funding for the site.

“It has been fantastic working with the Switch team over the last three years. They have brought a refreshing entrepreneurialism and their ability to continually challenge the norm to add value has been a real benefit to SevenCapital. We are in the last stages of completing the hotel and I truly believe that having the Switch team by our side from the beginning has saved us significantly in the construction costs and time on site. There is a clear understanding between us that will ensure the hotel opens exactly as we both want it to. Aparthotel Birmingham Snowhill has been created to the specification we believe our customers and teams will require, and with numerous design features that will make it entirely unique.”

Harj Mattu, SevenCapital