How A SSAS Pension Funded A Boutique Apart-Hotel And Flexible Workspace In Stirling

A derelict department store, a bold pension strategy, and a belief that buildings should trade like living ecosystems. We sit down with Neil to share how we transformed 45 King Street into a boutique apart-hotel and flexible workspace that runs on smart tech, focused design, and community energy.

We trace the leap from three decades in corporate sales to a SaaS pension-backed acquisition, breaking down how an OpCo/PropCo structure and VAT registration funded a full fit-out without bank finance. On the workspace floor, licences replace leases, soundproofing and climate control lift the bar, and co-working acts as an incubator rather than a crutch. When bigger suites proved slow to move, we pivoted them into a thriving events business, adding steady weekday demand and opening the doors to local organisations, exhibitions, and workshops.

Upstairs, fifteen boutique rooms and suites anchor a tech-enabled apart-hotel experience. There’s no front desk and no restaurant; instead, guests get quality essentials, tight partnerships with local food and laundry, and a QR “cube” that connects everything from breakfast to support in seconds. A six–six–six–six comms cadence keeps service personal and consistent. Summer occupancy climbed past 70 percent, and a growing pipeline of pre-booked coach tours stabilises seasonality while B2C channels fill nightly gaps. We also get candid about the tough parts: late-stage compliance changes, nine months of delays, and the real cost of lost trading days. The lesson lands hard—add contingency for both money and months, and build early alignment with building control and fire safety.

If you’re curious about SaaS pensions, flexible workspace operations, boutique hospitality, or how to monetise a multi-use asset with one empowered team member and the right tech stack, this conversation maps the playbook and the pitfalls. Subscribe, share with a fellow operator or investor, and leave a review—what strategy would you try first?

Transcript

Roles Reversed: Meet Neil And Jerry

SPEAKER_01 0:11

Welcome back to the Stirloving Business Podcast. I'm Neil Monday and uh welcome to Studio King Street. So today we're gonna do something a little bit different. Uh I'm in the hot seat, I'm gonna be interviewed um as opposed to the other way around. Um so I'm gonna introduce my guest uh in a second, uh Jerry Alexander uh from the Commercial Property Investor Podcast. So he has his own podcast in the commercial property uh domain. So without further ado, I'll uh I'll introduce you to Jerry and uh and we'll get things kicked off.

Neil’s Corporate Background And Pivot

SPEAKER_00 0:41

Hey Neil, thank you very much for uh having me along here. I'm looking forward to this discussion. The seats are reversed though, right? So I'm gonna be asking the questions. I know you've been running a few podcasts today, but I think for your listeners, um it'll be quite interesting for somebody to ask you the questions, right? Absolutely. And to go into this uh building, what you've been doing here, and a little bit about some of the plans you've got for the future. I'm also quite keen to learn some of the challenges during this project because you and I have known each other for a little while, certainly during this process, right? And I I want to unpick some of those um more difficult parts that you've had as you've gone through this process. As long as you promise to go easy on me, I'm all good. Oh yes. Let's see, right? That's what editing's for, Neil. But essentially, the first thing I want to do is let's give your um let's give you a chance to just talk about your background before property, because I want to learn a little bit about your skill set before you came into this, because this is a big project, right? We've got a part hotel here and service offices across three stories. We'll get into the guts of it later on. But it's not a kind of first rodeo kind of project, right? So let's just get a bit about your kind of more your corporate background, then we'll talk a little about property and then we'll talk specifically about this one, right? So maybe you could just introduce yourself.

SPEAKER_01 2:00

Okay, so um Neil Monday. Um I've been in property probably since 2021. Uh when I talk about property, you know, as a business. Yeah. Okay. Um, but prior to moving into property, uh, I spent almost 30 years in a corporate role. Um in a sales and uh sales leadership capacity working for very large IT companies. Typically American big corporates, you know, you'll have heard of Huela Packard, Cisco Systems, that's where I cut my teeth and and and had my uh career, which I would say was uh a pretty successful career, and it's afforded me the opportunity to do what I'm doing now in terms of property. So um four companies over that kind of 30-year span, uh as I say in different leadership roles and and um individual contributor roles, spent some of that time in Singapore, so kind of did two years uh overseas running some uh businesses for Cisco, uh sales businesses for Cisco, uh took a redundancy from that and came back to the UK. Um did two more organizations uh probably from 2016 to uh 2022 when I eventually kind of gave up my corporate career. Um, and I had a small overlap where I made my first property investment, which was the one before this particular project.

SPEAKER_00 3:18

That's the dollar one, right?

SPEAKER_01 3:19

Correct, yeah. So what what we did there, and this will give you a little bit of uh idea in terms of my psyche in terms of how I ended up uh with such a large project here, is the intention was um tail end of COVID, looking for something new, uh wanted to get out of the corporate game, it was taking a bit of toll, a bit of a toll on the body with the travel. And I decided to um initially look for a couple of buy to let properties and just to kind of build a supplementary income, uh passive income. I think you know, uh we all we all talk about. So Neil being Neil had decided to buy a whole apartment building. Um that was just coming to the end of its development. So uh eight apartments in total, um as opposed to just a kind of a single. So that was on a classic buy to let commercial mortgage, you know, get over the ADS challenge of you know, five five or more properties. And uh that's where I kind of started uh getting interested.

SPEAKER_00 4:20

It was two-thirds of the way done.

SPEAKER_01 4:22

Uh so I kind of finished it off uh with my inputs. I didn't physically do the development. There was another contractor and developer did that, but I kind of shaped the end product to uh to get me what I needed out of that.

Discovering SaaS Pensions And Strategy

SPEAKER_00 4:34

Yeah. Okay. And then we met probably around about that time. I think you'd already bought that when you were in the process of doing it, right? You were trying to recollect earlier on, it's probably a networking something or networking meeting or something. And at that point you were like, right, I'm I want to go and do some more commercial-oriented stuff. Um we'll come on to the finance and all that a little bit later on, right? But but what made you think about this type of project, or was it just opportunistic? You're out looking at various different options, and this is actually the one that came up to us.

SPEAKER_01 5:06

No, it's a really good question, Jerry, because what happened is uh whilst I was I wanted to get into property, I knew that was where I wanted to kind of take the uh you know the rest of my kind of career, if you like. Um, acquired the building of dollar. Um, but what then happened is I was starting to listen to lots of property podcasts. Um I was on seminars, webinars, uh, came across your podcast during that period. And I came across an organization called Wealth Builders, Kevin Wheeler. Yeah, uh, who look more holistically at wealth building. Property is just one of those pillars that they they they focus on. But they also focus on things like how to leverage your pension fund, and and you know, SaaS pensions is is is is the kind of problem that they focus on. So on a webinar on uh Good Friday, I remember really clearly during COVID, so all kind of locked down and looking for things to do. Um I listened to Kevin Whelan talk about SaaS as a you know as a proposition and how business owners could uh take their pension and recycle their pension uh before pensionable edge. So that got me interested in doing the research on that, and then I realized very quickly that commercial property was a really good vehicle to use within that strategy. Um one of the big drivers for me by going into property was to generate income and cash flow. And uh I got a sense, didn't know for sure, but I got a sense that commercial property was a much better proposition for that than residential.

SPEAKER_00 6:34

Yep.

The Building’s Past And Potential

SPEAKER_01 6:35

Uh I was doing some service accommodation in my block of flats as well as some kind of traditional long-term rentals, and I actually quite liked it, but it wasn't scalable enough to make me money because you you obviously need scale, particularly with service accommodation. There were some licensing laws coming down the line, which we were starting to hear about, you know, the short-term licensing. And I thought, you know what, if I'm gonna do this, I'm gonna do it properly, which is you know, thinking big again, and I want to do it in in a location that's going to attract you know a large uh footfall um to make it worthwhile. So that's what got me thinking about commercial and then starting to explore options for it for a property to do commercial in.

SPEAKER_00 7:18

Yeah, and for those that don't know, a SaaS is a small self-administered scheme. It's essentially um an opportunity for individuals if they they need a sponsoring company, i.e., they need to have their own business, but essentially they can transfer their pensions into a new trust. Essentially what it is, it's a separate vehicle which is your SaaS. And then from there invest in whatever areas you want to that are within the rules of the HMRC, including commercial property. Resi's debatable. Um certainly I I think I would find that extremely difficult to do. But commercial, absolutely. And traditionally that whole pension vehicle set about so that business owners could buy their own property, operate their own business from it, which is exactly what you've done here. So let's let's get more into the Nisegurity. So just give us a rundown on what this building is and what it does and what type of customer it serves.

SPEAKER_01 8:11

Okay, so um we've got and round numbers, yeah. Uh circa 20,000 square feet of uh space over four floors if you include the ground level as you come into the building from the front or the rear. The first floor of the building has been developed out as a business center or a flexible workspace business. Um we'll talk a little bit a bit more about what that is and what it isn't um you know as we as we get through the conversation. Uh we have an events business on that floor as well, uh so large meeting space for um you know corporations or any type of organization to come and run a run an event or a pop-up event. And then the two floors above, we have um a 15-room apart hotel. So we're on the top floor of the building as we sit here now, and on the top floor we also have a professional recording studio, uh, which is Studio King Street.

SPEAKER_00 9:00

Which is where we are right now. And when you and I first looked around this building, which you have to remind me, was that 22? It would have been that now.

SPEAKER_01 9:08

Uh January 22 when I bought the building. I was in the process of taking it before. It was before you bought it around about that time, because you came in, you're probably one of the first people to see it other than myself.

SPEAKER_00 9:17

So I remember going around and it had been half fitted out on the office floor as serviced offices, but in a way that didn't involve building control or any kind of real compliance. Yes. Right? So as much as a lot of the work looked great, a lot of it had to be redone, didn't it? And the upper floors were really just a shelf. In fact, interestingly, it's in a really historical part of town. The facade this building is um is spectacular. The the rear of it's a really nice um property, and basically the interior over the years has been adapted fully for office space. Yes, there are a hotel in the window.

SPEAKER_01 9:54

The building exorted life as a department store. So for those that are old enough who remember are you being served, I I've got the visions of I have a dashery department, a perfume department, etc. Right. And I've seen some uh images um of the building, Morton and Sons was the name of the uh company. I think it was a Falkirk-based firm go going back to the 60s and 70s. Over the years, um, that got taken over by I think Lloyd's Banking Group might have owned it at one point. Um, we've seen some uh signage and some different things as we were kind of ripping the building apart um with some of the sub brands of of Lloyd's group. So I think they used that as a training centre, back office. It was a training centre for a while from what we can gather. Um and in around about 2009-2010, Weatherspoons acquired the building. They might have acquired it a few years before that, but they had full planning for a um a bar, restaurant, and a 30-room hotel. Yeah. Um pulled a plug at the 11th hour because I couldn't get a liquor license, is is is what we heard. Uh, and then uh they went to auction with the building, and uh I bought the building from the guy that uh bought it at auction.

SPEAKER_00 11:05

Yeah, yeah. And he had spent quite a lot of money on that floor. I don't remember looking at, you know, there's a lot of let's put it this way, a lot of the infrastructure, cable that cat five cabling, all that sort of stuff was in, which we all we know is not cheap. And and to be fair, it was probably in for a different era. You know, there's probably a little bit more than we would use these days. Um and I think he'd just come to a stage where he'd kind of had enough, had other projects.

SPEAKER_01 11:30

Yes. What what had happened, uh this this guy is based in Edinburgh, predominantly he's in the service accommodation business, he's got uh properties up and down the Royal Mile, for example. Um Sterling was a bit of an outlier for him. Um and uh he's from the actually from the borders as it happens. And Covid comes along right in the middle of his uh development project, and uh he had to send all of his contractors home. So that's why when you came in, we had a part finished floor with uh dip rock and all sorts of materials lying all over the place. They literally put all of the tools down and left site. So COVID had passed and uh he couldn't he just didn't have the heart to get started again.

Designing The Workspace Mix

SPEAKER_00 12:13

Yeah, yeah, yeah. I mean I I I I remember the time looking around it and knowing the kind of the the aspirations you had for the building and the condition the building was in, which was good, it was a good condition, right? Just needed rebooting um that you'd want to watch with this building, right? Really nice building. Uh, you you know me and I I love old buildings, right? You just can't build old buildings. The great thing for you is internally um a lot of those walls that are problematic had been removed, so they were open floor plates. And from memory, it's about seven, seven, six and a half, seven thousand square foot of floor plate, roughly. Yeah.

SPEAKER_01 12:53

Um slightly more on the uh office level because we had the annex part of the building, which was a bonus, yeah.

SPEAKER_00 12:59

Right. So just just remind me, how many units do we have in the serviced office level?

SPEAKER_01 13:04

So we have thirteen private offices that excludes two additional offices that uh I house my business out of, and the housekeeping team organization uh use the other one for their business. Uh so we have thirteen private offices. Um we have a co-working hot desking area as well. Um, 15 desks in in that particular space.

SPEAKER_00 13:24

And who predominantly is that audience that you're targeting for that space?

SPEAKER_01 13:29

Well, we started out looking at the small to medium business community. Um, but what we've ended up with is a bit of a blend. So and this kind of ties in nicely to some of the kind of community kind of hub elements that uh that we've been that we had a vision to deliver, and it's just naturally happening as a result. So we have um you know, in in some of our two desk offices, for example, we have uh we have a small marketing agency um external to my business, but Rebecca is my marketing director. Yep. Okay, she does all of our marketing, socials, strategy, everything else. The guy next door does our websites and our CRM systems, works very closely with Rebecca. He has his own business, his own website business, etc. We have um a cybersecurity networking consultant who happens to deliver and look after all of our IT for the building, quite convenient next door to the uh website guy. So we have a whole corridor of these small businesses that we met, they're all chambers of commerce members, they're all connected and work very well together. But now they're delivering services to other businesses in the building. So what else do we have? We have a Californian biosciences company based here, uh, their European finance team. We have a renewables energy uh Norwegian company who do a lot of grid connections and high voltage uh uh wind turbine stuff. And they've established and set up their UK headquarters in this building. They were originally looking at Perth and seen the building, they decided Stirling was probably a better option for them. We have a letting agent. Uh so the letting, you know, uh residential lettings. Typically the high street was uh you know where you would uh go in and out of shops. They didn't need a shopfront anymore. Nope, internet does it all for it. Um we have a uh finance broker uh in the building as well. We have a tour operator um who brings a lot of business to our hotel, Scotland Folk Tours and Heartland Travel. Um so we've got a real mix, but they're all small to mid-sized, fourth valley-based businesses in the main. So we'll have international.

SPEAKER_00 15:38

So in terms of space, um look, you you know, I I obviously have a chance to have a look around the space. So I would say it's high-end, yeah, I'm sure you would agree, right? Um your product is kind of a superior product, you've looked at the competition and you've you've focused in on where you think there's a gap, and and a hundred percent agree with you. And you're saying there that although you had maybe a thought on who your target market was, you've been open to the fact that that might change, right? At the end of the day, it's who comes through the door and takes space, right? You've not necessarily created that, you've not said no to anybody, I assume. Maybe you have, I don't know. Um, but these things tend to evolve, don't they? As you go through that process of bringing in customers. And some buildings I I'm sure would evolve differently depending on the product mix, you know, and and that's sorry, on the on the first initial customers that come in. But it's quite interesting as you go through the process that as much as you think I'm gonna target X, Y, and Z or I'm going to um create a space that's more to do with touchdown spaces and co-working, actually, you have to be able to adapt to whatever comes through the door within reason, not going away too much from what your original goal is. But it but the actual customer base, I've had this discussion a few times with people where they're like, Oh, you need to know your target market, you must know your target market. And in some respects, that's very true. But I found that our customer mix is so diverse that it's a it's a common need, it's not a common it needs it needs a flexible mindset that's and and it's it's the way that you set up the space. So maybe we just talk a bit operationally about the space because you you let your your units out on more flexible, right? But also maybe shorter term 12 months to give businesses the opportunity to scale up, scale down, whatever it is they want to do. Because often, especially in these days, businesses don't quite know where they're going to be in two or three years' time. So signing a lease for five years, that commitment means you are committing no matter what happens in the economy, whoever decides to start attacking whoever or whatever's going on in the world, um, you're committed to it. Whereas in this scenario, it's a bit more flexible, isn't it? Yeah, it is.

Pricing, Flexibility, And Operations

SPEAKER_01 17:48

So what we've got, and we've got some good examples of how we've had to adapt to fit the market conditions as we've started to learn Sterling and the Sterling and Fourth Valley business uh community. Um so you're right, um we do have a flexible offer. So from a private office point of view, we work on the basis of licenses as opposed to leases. So 12-month licensing agreement with with a three-month notice period uh to give companies that flexibility, you've said, of not having to buy into long-term leases. Um that's been a successful um we use the word boutique, we purposely don't use the word luxury, but we are at that boutique end of the market, soundproofed offices, very high-tech access control, uh air source heating, cooling, and all of those offices that can be controlled individually. Um, the core working space, which is interesting, we set out with a view that there's got to be a market for that with the hybrid worker that can't quite justify having a private office. Um, but we we set up that structure around day passes, week passes, and and monthly fixed desks. What's ended up happening is yes, we do get day passes, yes, we get the odd kind of uh weekly pass, but in the main, people are coming along and basically signing up to a fixed desk, which gives them 24-7 access when they want to use it. Um access to the business lounge, so it's like having a private office, but you get to use the lounge as well, access to the on-site gym, which the hotel guests also get to use. And that's been a bit of a game changer, to be honest. So we've we've moved more towards those kind of longer-term, there's still short-term commitments, one month at a time, but you've got people build basing their businesses here as opposed to just dropping in and dropping out of the space.

SPEAKER_00 19:29

It's it's an interesting um area because you know, since COVID that's changed a bit. There's that and we found that our customers um who use our kind of shared space tend to have an HR department somewhere else paying for it, whereas it used to be that the individual there was paying for it. And the subtle difference is that the the spaces are having more and more corporate customers, it's just that they're individuals that work for larger corpus, they may we're in Stern, right? But it may be that their main office is in Edinburgh. So I go there two days. Days a week and then maybe come to you for for the other type. It's just interesting how it's evolved. But I do think that building a business around co-working is as an exciting proposition it is because of all the diversity and all the the um energy that comes with a co-work is isolated, it's not that sustainable. You've got to have the other stuff around it.

SPEAKER_01 20:22

Location based as well, I think. So if we were in Edinburgh or Glasgow, I think we'd have a very, very different conversation right here now, right, about co-working uh or London, right, or Manchester. But I don't know, being you know, being very central in Scotland, you'd expect to get more of that, but not necessarily. Um so I think the the fixed desk model, you're you're right, we are getting corporates or individuals who are taking fixed desks from us that work for large corporates, um, and they're those corporate organisations are more than happy to pay the invoice on behalf of the the uh the the individual. Um but then we're getting you know one two-man bands that are just they've just they're just tired of working at the kitchen table or in their home office. They want to they want to interact more with um like-minded people and and and uh and and have that more of the community feel. So and we're so central, we're near the train station, we do have on-site parking, you know, we just make it easy.

Events As A Strategic Pivot

SPEAKER_00 21:17

Yeah. I think from an investing point of view, um co-w so what we've the biggest benefit we've found from co-work, obviously there's an income from it, right? Um the biggest benefit is it kind of works as an incubator for people to take larger spaces or private spaces from you later. The other thing it does is it gives the building energy. Because you've got lots of different people coming in, they're doing different activities, they've got different types of businesses, just makes things more dynamic. So it really adds. So if you go in purely on a financial model to just do co-working, and by the way, I need to just confirm here co-working that we're talking about is not as the Americans would say, which is essentially serviced offices, co-working, executive offices, all that is all blended in the UK, or certainly in my head, co-working is more to do with individuals taking space in sh some kind of shared space. Um but it but the the serendipities that come from having that in your building are really quite far. And if you just do it as a one thing, a one-off co-work, I think that's where it becomes a bit more challenging. And and at the end of the day, it is very much a trading business, if that's the leg you're going down. Anyway, let's move on, Neil, because that's just one floor.

SPEAKER_01 22:28

Okay. We do have our events business on that floor as well. So we have Again back to understanding the markets and being able to adapt and pivot as as we've gone through things. Um the largest the larger offices, the 10 to 15 desk offices, we found very quickly were very difficult to um slower to move. To move. Yeah. And that you need the right type of organization at the right particular point in time in their journey to uh to take that type of office. So we pivoted uh because it's dead space otherwise, we need to make use of that space. So we created an events business, a meetings and events business. So we've got boardroom style, pop-up meetings, we have art galleries, art exhibitions, all sorts of things now happening in the building, which then also brings a new level of energy. Um and every day is different in terms of the type of type of organizational charity that we're hosting here. So we adapted, we basically brought that to the fore, and and that's be that's become uh another one of those things that we've we've adapted and changed as we've gone through the journey.

SPEAKER_00 23:30

I think Sorry, I think it's fair to say, you know, we we're sat here now, we're just trying to work this out earlier on. We're we're almost a year trading now, right? Um so when we first came around this project four or five years ago, wherever it was, you know, I've always wanted to to have this discussion with you, right? But I I think now that we're a year in, it's a good time to talk about it, right? And you're just saying there about adapting the the kind of office space to what demand you get and maybe what your pr your previous ideas were, and right, okay, let's let's pivot more towards events, etc. But in another 12 months I might have evolved again, right? And at the end of the day, it's just being entrepreneurial entrepreneurial enough to be able to reflect on what's coming in the door. It's it's surprisingly how many people say no to that sort of thing and don't say yes and figure it out later.

Monetising The Ecosystem With New Ventures

SPEAKER_01 24:18

Well, it's that's a good point because um again it's about optimizing the space, right? If you're in the space we're in the space business, you're in the same business as we are. So ultimately it's about you know monetizing that space as best you can, but at the same time trying to create the energy and create the community and everything else that goes with it. But at the same time, we do have a lot of synergy with the hotel, and we'll come on onto the hotel, but in terms of how we can provide more of a composite offer, particularly to corporates and and and those types of uh sectors. But the other thing that's really kind of um important to us as we go forward is getting more value from the building. Okay, so um we're in the process of establishing new businesses that might not have anything to do with the space, but we're using the space as leverage to create those those new businesses. A great example of that is a studio we're sat in now. Yeah. Okay, the recording studio. There's a whole bunch of new revenue streams that we can tap into, whether it's people recording audiobooks or podcasts like we're doing here. Um, but that would that's become a byproduct and an enhanced proposition that we've developed just by having the building. And that can take many directions. We're starting other businesses that have nothing to do with the workspace of the hotel, but we're headquartering them here because we've got the infrastructure to do that uh and the resource to do that and the technology to do that with the systems and processes that we've implemented. So from that perspective, you know, the next 12 months is probably about what else can we do to expand the use of the building and to monetize other revenue streams and new businesses.

SPEAKER_00 25:56

Okay. Let's move on to the hotel section. So another two stories, how many rooms have we got?

Inside The Apart-Hotel Model

SPEAKER_01 26:01

We have uh fifteen rooms and suites. So we have 10 suites, uh family suites sleeping between four and six people, uh depending on uh which one you go for. And we have five, what we would define as hotel rooms, um, all done to the same standard, you know, the suites and the rooms, um boutique, nothing. Totally standard. Okay. But um they're they're more ideal for couples or single, you know, individuals, uh you know, people that are staying with us that might want one or two nights. If you want if you're staying for longer with us or you're with a family, we we you know we uh we accommodate that within the with the So typically in a suite, what is somebody expecting in terms of facilities? Okay. So we're classified as an apart hotel. Yep. But an apart hotel can be defined in many ways, right? So on one end of the extreme, people think of an apart hotel as a full a fully serviced apartment. Okay, so cooking facilities, linen, laundry facilities, washing machine, etcetera. At the other extreme, a hotel room is a hotel room, you turn up, you stay for the night, there might be a restaurant, there might be a bar. We don't have a restaurant and bar, okay? Um we're a little bit unique because we're neither, okay, but we're probably more towards the hotel room as opposed to an apart as a as a service department. We don't have cooking facilities, we don't have laundry facilities. What we do to get over that is we have very strong partnerships with the local dry cleaning and launderettes, for example, and the local food and beverage establishment. So we can deliver breakfast to the room. It gets cooked in a cook school about a hundred yards from here, freshly baked croissants and scones that morning, delivered to the guests if they want if they want um breakfast in their room. And we have crockery, we have a sink, we have a fridge, a pod machine in the room. So we have basic facilities, still very good quality, but basic facilities in the rooms to be able to allow guests to bring food and beverage in.

SPEAKER_00 28:02

Okay. Alright, so for those listening that are thinking, right, they're they're picturing a hotel, perhaps. The differences are you you've you've not got a human being on the front desk, right? There's tech being enabled there, right? Um you're straight up to your room, and within that space you've got um uh very nice facilities, right? I've seen the rooms, they're fab. Um, but essentially on tap you've got all these different services that are available, they're just not delivered um continuously on site, which obviously impacts costs, right, from an operations point of view, and ultimately the price. So I think with the the model you've just described there, that the the opportunity for the customer is to get a much comfier quality space, right, the compromise is that they don't have somebody necessarily waiting on them hand and foot at the door, although let's face it, most hotels wouldn't necessarily have that, right? Um, but the the partnerships that you've described are all there in place, should anybody actually want some of those extra services.

SPEAKER_01 29:07

Yeah, and you make a really good point, but what we pride ourselves mostly on from a hotel accommodation point of view is the guest experience. So, again, using a combination of technology um to and local partnerships, uh the feedback we actually do get, and we get some fantastic reviews um on a on a consistent basis, is how we're adapting our guest experience model. So we're using technology, so we have the concept of a um uh a wooden cube with QR codes in the room. Each face of the cube you can you can book your restaurant or you can book your nice yeah, you know, your attractions or or or whatever, you can leave a review. Um so we're engaging the guest. So we you get we get real-time feedback and we respond to that feedback uh real time if if they if they access the support ticket through the uh QR code, for example. So that's really very much the the focus we've got. Now we've got the concept of 6666, six months booking, six weeks before, six days or six hours. And whatever time frame you book, we pr we we enhance and provide the best possible engagement and communications. But we're using technology to its length degree to deliver that.

Tech-Enabled Guest Experience

SPEAKER_00 30:22

Yeah, so when you go more tech enabled with maybe slightly less staffing, it doesn't necessarily compromise on quality at all. It just means that the the product and service is slightly different. I I I would say that and this is very much the same in office space, right? That you can go for that tech-enabled thing or tech tech enabled approach, but actually what it gives you apart from any else is really good consistency, right? As long as the products you know that you're delivering is good, and it just means that the customer experience is consistently good. Uh, and I think in office space we've sort of seen the same really where you have tech-enabled good quality business or high-end service business, are both prospering. But the middle section where you're doing a vanilla product, a mundane kind of service, there are some people on site, etc., but there's no real uh focus on either quality and consistency or high-end that they're actually really struggling. And you and you've I'm sure you came to that conclusion before developing this, but you've absolutely hit the nail on the head, right, with this offer.

SPEAKER_01 31:30

We found the balance. I mean, it did help being in the tech sector for 30 years, right? I used to sell the stuff for a living to to corporates and hospitality. But yeah, it does help that you understand what the problem is before picking the technologies and deploying the technologies. But what it does, the guest experience is paramount to what we do, whether it's in the office space or the colleague experience, we call it in the workspace, or the guest experience in the hotel. But the um the flip side of that is productivity. We have one member of staff that operates this entire building.

SPEAKER_00 32:00

Yes.

SPEAKER_01 32:01

And because of the technology enhancements and and the enablement of of a lot of those processes, um it frees her time up to spend with guests on the phone and upselling, cross-selling, and just being there and offering that kind of personal touch instead of being bogged down with admin every day from an operational point of view. So that that's the other byproduct of implementing the tech.

SPEAKER_00 32:23

Yeah. Yeah. Okay, right. Um we touched on this earlier on about SaaS. So I just want to talk a little bit about the finances project. Because uh, like I said, this is not maybe going to be on somebody's radar as their first project, and and I would say for most, not their second project, Neil, right? But you decided to take this one on. Um maybe you could just talk a little bit more about the finance. Did this project kind of meet expectations on costs? Obviously, after that COVID period, we as we all know that build costs changed completely. So just be just maybe give us a quick run through of um how you find the finance process and whether we got on budget.

Funding Via SaaS And OpCo/PropCo

SPEAKER_01 33:01

Okay. Yeah. So we um when I say we, it at the beginning it was me and my wife Marie. Yeah. So we uh we co-invested our kind of you know hard-earned pensions, put it into the SAS pot, booed them from the kind of uh money purchase schemes that they were currently in. Uh we had a quite a decent decent sized pot, as you can imagine, 30 years in the uh industry for me. My wife had a final salary pension that she'd converted. So there was a nice healthy pot. Um we thought there was going to be more than enough in that pot um at the time to buy the building and complete the development. How wrong was I? Okay. Um like every development project or any project in general, you know, we we underbudgeted. Okay. So what we um what we did, and I'll I'll share some of the numbers with you. So we acquired the building for uh 500k uh back in 2022, January 2022. We ended up in in the end, we invested about a million and a half into the development development and the fit out of the building. That excludes fixtures and fittings and the chairs that were starting now, etc. Um but a million and a half, so we were all in for about two million. Now, what we did is we brought um some business partners into the SAS who co-invested and put some of their pension pots into the same SAS. You can have up to eleven trustees in a SAS. So that took us to four trustees. We've got um uh equal uh 25% each um ownership of the assets within that SAS. We set up a limited company uh in parallel, that is now the operator, uh VAT registered. By the way, the SAS was VAT registered, so we were able to reclaim a lot of the uh VAT on the materials and the labour as we were going through the development and reinvest that back into the building. So again, 25, 25, 25, 25. So we've got um a model now where we've invested two million between four of us in the building. Um, haven't had a recent valuation, but I'm suspecting it's somewhere between the three and four. So maybe not quite double the asset uh value, but yeah, significant chunk of change enhancement on what it was when we started. Um the business itself, uh the trading company rents or leases as the tenant the property back from the SaaS. So we're paying ourselves market rent back into the SaaS, so we're topping up our pension tax efficiently today. That might change, uh, depending on what happens uh in in the future with pensions. Um and that's how the model works. Now uh I operate as the managing director of the business and we have three other directors. So that's kind of how how the funding vehicle worked. It's completely self-funded through the pension. The furniture was sat in this room in the in the hotel accommodation, is is on an asset finance agreement. So that was the only fully through the opco.

SPEAKER_00 36:02

We were basically describing a prop co opco. You're the prop co being the property company, which is essentially the SaaS just and then the operations business um being the one that you were just you were mentioning about.

SPEAKER_01 36:13

The hotel, the events, the workspace. Yeah.

SPEAKER_00 36:15

Yeah, yeah. Um just back to the budget for a second, what did you forecast? It was a ridge it don't mind me asking, I'm sure now make you square a little bit. What was your original anticipation on cost?

SPEAKER_01 36:26

It was in the region of one point two for the for the fit the fabric of the building um to get it to the standard that we've now dated.

SPEAKER_00 36:34

Yeah, okay. So we went so it was one maybe another three hundred grand, something like that. Okay. So twenty-five percent, is that right? No, no, yeah, roughly twenty-twenty-five percent um over budget.

SPEAKER_01 36:47

And the one point two, incidentally, did have some contingency in it as well.

SPEAKER_00 36:50

So build costs did probably go up by about thirty percent, so you may not be too bad there.

SPEAKER_01 36:56

Yeah, I mean the l some of the lessons learned, one of the big things which was a big contributing factor to those costs escalating were the delays that we ended up having uh through council building control, fire safety, that sort of stuff. Um I'm gonna say they were inventing things at the eleventh hour. They were coming up with new things at the eleventh hour before they would issue the completion certificate that we had to jump on, which signific had a significant impact on the cost of the fabric of what we had to do. So some of it we kind of knew and planned for, some of it was sprung on us at the eleventh hour.

SPEAKER_00 37:31

I I do remember us having those conversations prior to the last 11th hour, before that even, you know, just and certain conversations about um fireproofing, um how certain corridors are treated, all that sort of stuff, that lovely stuff.

SPEAKER_01 37:44

And then And nobody had any nobody had any kind of uh Nobody never presented to you as black and white, right?

SPEAKER_00 37:52

So everything's and then some things are presented to you later and and you feel hold on a minute, this is an addition rather than um a a completion because you have your your plan, your fire plan, and then um I remember it 11th hour, yeah. That shouldn't be there. That needs to be over there. Yeah, but why didn't you pick that up in the drawings? Well, we didn't. And you're and of course the challenge is you know, you're like, well, so who's gonna pay for this?

SPEAKER_01 38:19

Well, well, there's two things. One was who was gonna pay for this? Obviously, there's only one answer. Of course, there's only one answer. Um but the but the the flip side was in nine-month delay of opening and trading, which in itself had a knock-on effect and impact from a financial point of view, because we still need to keep the lights on, we've we've got significant monthly operating costs with no income. So, yeah, it was a little bit of a stressful time.

Delays, Compliance, And Cost Overruns

SPEAKER_00 38:44

Yeah, I remember doing a podcast recently just talking about that, and that people do underestimate what delays cost. It's not the fact that you're spending another 20 grand on doing something, it's the holding costs that people forget about. And and of course, especially in hotels, right? But it's the same in office space as well. If you don't sell that room that night, you can't get that night back to resell another time. You're not making widgets where we make ten a day and one day we might sell twenty so we can catch up, right? It's time that you're selling and it's gone. So we can't.

SPEAKER_01 39:17

And it's the community wealth building impact that has as well. So the the cafe is uh so we did some kind of estimations for the council, for the economic growth team, of what we'd lost. What we'd personally lost is uh you know not being able to trade. But what the um you know, what the the the the cost to the community was. So we we calculated on a monthly basis that the community was losing about£200,000, and that was very conservative by us not opening what we should have opened.

SPEAKER_00 39:45

Right. So um let's just quickly talk we are year in. Let's talk about hotel occupancy. Um you've you've mentioned about the offices, you've got a mix there of private clients and growing clients. And one of the things I would say, touching back on the large Larger offices. We found in our experience that a lot of those larger offices get let to customers growing. So I think it's just a it's kind of a time process where some of your smaller guys right now will be saying, Have you got any bigger space, Neil? Where can we move? You know, and they start moving up to these bigger spaces. So you've sort of touched on occupancy there. You've used some of those rooms, it's got quite a mix of tenants in there. I think you're pretty much full. I'm sure you could see the space.

SPEAKER_01 40:26

Yeah, but we've got one large space, which one of the back to your point you just made, one of the uh tenants that we've currently got in are looking for a larger space. So they'll step up. We do have some demand for the kind of small to mid-size, so we should be able to backfill that small six desk office particularly.

SPEAKER_00 40:41

So we're all right on that. So in terms of the part hotel, um we've gone through a summer season and we're we're looking now, forecasting ahead, you know, obviously based on some bookings, but also just what we we think we're gonna get in January, February, March. Just maybe give us a rundown of how how it's proceeded this year?

Occupancy, Tours, And Seasonality

SPEAKER_01 40:58

Yeah, so we we kind of opened the hotel at the beginning of the summer. So when a summer for us is really starting to kick in in March, right? You're starting to get the kind of spring trade and then it kind of ramps from there, right, into the into the height of summer, July and August being the busiest months. Stirling is a tourist destination. We get a lot of international tourists come through uh the city over that kind of seven-ish months of the year. Um we came into the year with a book of business that we'd locked in through a result of what we'd been doing with Visit Scotland and the travel trade. So we had some tour operators, um, one of which is actually one of our clients who's grown from a two-desk up to a four-desk and they're going on that journey in the office space. So every time they walk out of the office, there's another tour, Neil. Right? So a tour for us is um pretty much the full hotel for the for the night or two nights um at 30 to 40 times a year, okay, from a particular operator. So um so we came into this year with about 25 tours along those lines. Um going into the new year, we've got um about 50 to 60 of those. So probably double. So that's business that's locked in for those months, and then what we do is obviously on the the B2C market through the booking.coms, the expedias, typically that that's where we get most of our business. Um, we're plugging those gaps, the stocking fillers, as I call them, um, you know, around those tours. We got a lot of short-term bookings at the 11th hour, people coming tonight or tomorrow night or the night after as well, particularly in the summer. So occupancy through this first year, summer has been pretty good. It's been north of 70 for the height of the height of the year. Um we came into November thinking it's gonna fall off a cliff. What ended up happening is actually we ended up at about 40% in in November. It's not bad. December's looking okay. So we're kind of looking at January Feb being pretty fallow from a hotel point of view, but we're adapting our focus and now focusing on the corporate markets to try and enhance and then you know the occupation.

SPEAKER_00 43:02

I mean the we spoke there about customer kind of um parameters or certain types of customers, target customers for office space, but it's exactly the same in our part hotels, isn't it? I mean a number of our mutual contacts have um service accommodations, some of the part hotels, and and for them it's not holidays at all. It's it's maybe more um trades that are maybe using the facilities, blue-collar workers, sometimes it's more white-collar workers, sometimes it's long-term lets, it's insurance, you know, it's all sorts of sectors, isn't there? And and I do think that that the whole um I maybe shouldn't open this can of worms, but the whole process that residential's been through in the last sort of ten years of tightening up on leases, um putting in certain provisions so that you can and can't do this, etc., has actually really enhanced that whole serviced space market, hasn't it? Because people don't necessarily want to take something on for a year or whatever it is, they want to be able to have that flexibility. And and it's funny how by kind of plugging one hole, they're opening up another market or creating another market, right? But you've really focused in on coach, and I remember that early on, you're really focusing on, right, let's let's look at tours, it looks like a strong bedrock for us to build on, and it's amazing to hear you've got 60 booked in for next year. That's amazing, and and we're not into next year yet, right? So moving forward from here, um this project's obviously got another couple of years to bed in, right? And obviously you're working on that hard. But is there anything else going on in the background? Have you have you thought to yourself, well, I need a break here?

SPEAKER_01 44:39

Or Well, I definitely need a break, but um but I can't stop really. I've kind of started now and I feel like you know I'm kind of ready to start to focus on the next thing. So who who knows? Um there's you know, I I've gone from developer to operator, investor to developer to operator. Yep. Um three hats. I'd like to go back to developer again.

SPEAKER_00 44:59

Um You also let me let me throw in the fourth hat there, Neil. You you're investor, developer, the actual building construction manager and the project manager. Yeah, yeah. And now operator, right? You've got all four hats.

SPEAKER_01 45:12

Good point. Yeah. So um yeah, I'd like to go back into development. Um I'm looking to potentially do more of the same.

SPEAKER_00 45:18

Yeah.

SPEAKER_01 45:19

Um maybe with a slightly varied offer on what we're doing now, but not too dissimilar. I've got a few ideas, probably double down in Stirling because we think there's more to go in Stirling. It's on the map of uh as a city that's that's going places if you look at some of the industry reports, what Ernst and Young are talking about, and right move and and places like that. So, you know, the new film studio, we've got the Lumo train service four times a day coming into Stirling from London um from spring. So things are happening in Stirling, so we think there's more growth here, and there's more visitors and and and more opportunity to develop our business uh businesses here. Um so whatever we do, it's something similar, I think, and it's uh gonna not be a million miles away from where we are.

What’s Next For Stirling Growth

SPEAKER_00 46:04

Interesting. Okay, so Neil, just before we go on to the last question, could you just share some socials where people can maybe find you guys?

SPEAKER_01 46:12

Yeah, so uh all of our four businesses, so the apart hotel, King Street Apart Hotel, um that is on Facebook, Instagram, I think we've now got a TikTok account for that as well. Um the workspace business, working flexi spaces is on LinkedIn. Um predominantly that's our main channel for that business, although we are on Facebook as well. And our new uh studio business um that we that we've uh just launched in uh partnership with Johnson Media. So we've got a collaboration going with Johnson Media out of Creef for our podcast service, um, is on all of the channels, including TikTok and uh the events business the same. So we're on all the socials, um, but you can kind of reach me on uh on LinkedIn, that's probably the best place to uh to get a hold of me.

SPEAKER_00 47:00

Perfect. Thanks for sharing that. Right, one last question, right, which I'm sure some people listening would would dearly like to hear the answer to. So having done all this project, okay, and being through this process, and as we just described, being through all four hats of doing this, um what's been the chief thing you've taken away from it that you think, right, next time round I'm gonna be much more aware of that? What what are the kind of key lessons you think, right? That one I'm not gonna do again.

Lessons Learned And Team Structure

SPEAKER_01 47:32

Yeah, that's that's a good one. Um you know, the first thing I'd say which every investor or developer would probably say to you is um build the contingency in from a financial point of view up front, right? But I don't just mean in terms of money, time, right? The biggest learning was the delay. Now, will it happen as badly the next time? Probably not because I've got a lot of learnings and I know some of the things I would do differently to navigate some of that delay. And you know, the local council have even said, look, we know how each how each other operate now, the next one won't be plain sailing, you still have to comply and tick, tick, tick. But you know, we we should be able to motor through some of those uh some of those things. Um I would say the big learning, however, for me is um contractors. I think I've learned enough by being very hands-on uh from project management along with my site manager Alistair, he was heavily involved in the project. Um we would not go down the main contractor route again. We'd uh source the trades. We've got enough of a of a uh relationship with the trades now to be able to deliver the next one uh without a main contractor. Uh obviously still following the CDN guide guidelines and health and safety guidelines uh to the letter. Um that would be a big one. And I would say what would we do more of it's the community, the the engagement with the community, the community wealth building thing. That's give us lots of goodwill. So don't try and do this in isolation. Work with the community, show them the benefit that they're gonna get from your project, and that brings awards. Um and I want to win I want to win a few more awards for what we're doing. Um and uh yeah, that's that's what I would say. So I think the big thing is um I think I've learned so much from this from the get-go that I would I would uh I would be able to save money, reduce time, it's it I think it's and reduce costs.

SPEAKER_00 49:26

It's just the reality, isn't it? When you've done it once, maybe done it twice, you just get more streamlined, you're you're you're niching a bit further, and and it's like why would you jump from one niche into another and then have to go through that whole process of relearning and and all that because that's so valuable, isn't it? All those lessons that you pick up. So you've spoken about the finance, the delays, main contractor. Is there anything on the operational side or the way that you've set it up to do the operations?

SPEAKER_01 49:57

I I think I'm I I'm really pleased. I mean, the original intent was to outsource the whole thing. Yes. We spoke about this right at the beginning. I didn't want to be a building operator, I didn't want to be a workspace operator, I didn't want to be a Basil Faulty, right? But I've become all of those things. But the thing that's really helped and enhanced um that yes, you do need staff members. We've got one amazing member of staff who is very, very much honoured from a hospitality and engaging clients. So we thought the face of the business needs somebody with those skills, so let's invest in that person and and um not just in terms of finding the right person but invest in their training, their skills, uh their further education. Um technology, technology, technology. But don't just throw it in for technology's sake. Understand your business process, the problem you're trying to solve, take a step back and adapt and iterate. Don't throw it all on it in on day one. Iterate it so that you get to the outcome that you're looking for.

SPEAKER_00 50:55

Yeah, I think that that's that from watching from the outside of this project, it's definitely something I've taken away is your application of tech. And and to hear, you know, that really you run the site with one person, right? I appreciate let's be fair, you you know, it's maybe the odd little hand from you, right? Yeah. And Paul. But essentially day-to-day running, operating, it's Lauren, right? Laura. Laura, sorry, that does that. Um and you know, she she's when I met her earlier on, you know, she's uh clearly got a hospitality background, you know, very much about meeting and greeting and and making people feel welcome. Um did you find that process of finding that person? Because you said there look I had to work out that I needed somebody like that. Um how did you find the process of actually it was kind of by chance.

Closing Thanks And Reflections

SPEAKER_01 51:41

I mean, we were looking to outsource and we were talking to different organizations that uh that offered that type of service, and um we found her through that process. Uh we were very lucky and we we made a decision pretty quickly to bring her on board. So and uh yeah, yeah, she's never looked back any other way. It's been a fantastic uh move. So fantastic.

SPEAKER_00 52:00

Right. I think that is us, Neil, until we bring this show back here again in maybe a year's time to see how things have developed, right? Jerry. Well, there there might be a case of that. There might be a case of that. Um any interviews that want to be done in Sterling, I will be here, right? Um thank you so much for joining me. It's been a real pleasure to watch this project, to experience some of it, to come and see the different stages. It's a fantastic project. You've done really well winning an award, and you dearly should um be very proud of what you've done here. It's fantastic.

SPEAKER_01 52:33

Thank you, Jerry. All right, so all your help. Thank you.

SPEAKER_00 52:35

Cheers, Neil.

SPEAKER_01 52:36

So uh I hope everybody enjoyed that on the Sterling Business Podcast today. Thank you, Jerry, for coming along and uh sitting in the other seat and interviewing me about the project that we've got here. I thought it might be a bit enlightening to uh to understand what we're physically doing here in number 45 King Street, and in particular in the in the studio King Street where we're sat here. So until next time, until our next guest, uh, thanks for listening.