Naomi Heaton: the Woman Disrupting the Hotel Biz
Is it a hotel? An apartment? A private club? Visionary Naomi Heaton has combined all three, to create a sexy new mash-up, The Other House, a 200-unit Residents’ Club in London’s central South Kensington neighborhood, which had a partial soft-open last month. The place is jaw-droppingly beautiful.
Behind an impressive facade of 11 Victorian townhouses, the interiors have been completely (and sustainably) redone in a bold maximalist style–think big patterns, texture, and jewel tones––each space is the perfect Insta or TikTok backdrop, but the vibe is actually much more subtle and cool. Besides the 200 “Club Flats” (apartment-style rooms), The Other House offers private meeting and dining rooms, and a variety of event spaces. Its Private Club for residents includes two bars, a screening room, and extensive wellness and wellbeing spaces, including a vitality pool, state-of-the-art gym, and a meditation hub. For guests and locals, there is an all-day street café, The Other Kitchen, and a signature cocktail bar, The Owl and Monkey.
When I visited shortly after the soft open, the place was already buzzing with some remote workers on laptops, a family checking in and a few stylish London ladies having coffee. Seeing The Other House in operation, it is a wonder why nobody else had thought of combining apartment-style units with hotel and club services, seems so simple. Usually, the most ingenious ideas are, but they require an outsider…someone with a different and fresh perspective. And that’s where Naomi comes in, she wasn’t even in the hotel business, which is why she could see the opportunity. Before creating The Other House, Naomi spent the bulk of her career building London Central Portfolio, a leading property firm operating in prime central London, offering a wide range of services that include real-estate investment, acquisition, development, renovation and interior design, which she started in 1990. We chat with Naomi about the evolution of The Other House and her impressive career in real estate.
Before we get into The Other House, how did you get your start in real estate?
After graduating from Oxford, I was working in advertising at Saatchi and Saatchi. Not seeing the logic of paying rent, I ‘begged and borrowed’ to scrape together the money to buy a flat in Camden Town that needed refurbishment. I got the “property bug” then, and while I was still working in advertising, I bought other properties and fixed them up to sell at a profit. Not by spending more, just by doing it better.
So, you started as a side-hustle?
Yes, as a rather major one, as I was investing a lot of money. In those days, you could borrow money from the bank manager over lunch, and that, combined with maxing out my credit card was how I was able to finance the business early on. I could just make it. When I decided to leave advertising because of an entrepreneurial streak, I realized that being a developer, which is essentially what I was, you were only as good as your last deal. But, I saw there was a need for a more full-service business, especially for foreign investors. Acquire, renovate, let and manage.
At the time you started London Central Portfolio, in 1990, you must have stood out as a woman in real estate?
I did stand out, and I still do, the industry is very male-dominated. But, I never felt that it made any difference. I don’t know why, looking back, but I have always been very independent.
Did you feel being a woman held you back in any way?
No, I never felt it was a barrier. If anything, I stood out and so did my ideas. I realized there was a gap in the market and offered something different. In those days, people didn’t see residential property as a commercial asset class, and looking at it through this lens opened up a lot of opportunities.
Let’s go back a second, how did you scale the business from doing one apartment at a time to raising funds?
Life is made up of breaks as well, you have to be dogged and determined, but good luck is important. In addition to buying and fixing up properties, we were doing a lot of furnishing of flats and other properties. We had a little article in a magazine for ex-pats that doesn’t exist anymore called Residents Abroad, promoting our furnishing services. We were approached by someone very senior at a bank in Hong Kong, to furnish a flat. Then they needed letting of the flat, and this gave me entry into a major bank in Asia. This was my biggest break. It led me to Asia and a whole new client base that helped propel London Central Portfolio.
After that, I was also introduced to clients in the Middle East and became very involved in Shariah funds, which are investment funds governed by the requirements of Shariah law and the principles of the Islamic religion. Shariah-compliant funds are considered to be a type of socially responsible investing, and there was interest in central London real estate.
Our business model was attractive to overseas clients as we offer the full range of services including property search, acquisition, refurbishment, design, letting, and property management for investors, home buyers, and landlords. What makes the company stand out in the London property market is that LCP fully represents the buyer, sourcing to their requirements and not taking any commissions or incentives from sellers, unlike every other high street estate agent, local or global. LCP stay with their clients throughout the lifecycle of their property ownership.
What an amazing origin story, and now you have been leading LCP for some 30 years, what inspired The Other House?
I noticed some interesting trends. First, people went from renting three beds to two beds then to one-bedroom units, but they had to be as central as possible. Location was key. Then they wanted the interiors to be nicer and nicer, really beautiful interiors that showcased the kind of lifestyle they wanted to be living. We were doing everything from hanging pictures to laying the table so that each property looks and feels like a home. Finally, the last trend was the need for immediacy which is the digital generation, people wanted perfect places to stay but did not want to wait. It was at that point I realized we were actually providing hotel-style living so it made sense to me to create purpose-built accommodation that offers the services people want. That was ten years ago, basically the very beginning of the idea for The Other House.
Wow, you were really ahead of the curve. How did you begin to develop the concept?
Well, these things take time. The first thing was to find the right people to partner with and our co-investor is APG, a large Dutch pension provider that was already in the hotel space with, for example, CitizenM and The Student Hotel. We met them in 2018. They are an ideal partner because they are long-term investors, really into sustainability, ESG, and doing things right. They loved the flexible stay concept that we were proposing and the idea that people could stay a night, a week, a month, or even a year, as this offers a more stable revenue stream. There was tremendous enthusiasm to combine hotel services and facilities with flat-style accommodation.
Together, we bought the property on Harrington Gardens in December 2019. We also kept looking for other properties and closed on another property in Covent Garden in September 2020 and more recently in Belgravia. We are focused on London and looking for more properties, then I think we will take the brand to New York as our first international adventure.
What is the elevator pitch on The Other House?
The Other House is a pioneering concept that provides all its residents with apartment-style living, club facilities, and hotel services on tap––and no membership is required. The concept, shaped through a residential lens rather than a conventional hotel approach, offers something completely unique for those wanting to live like a local, to feel it is their other house, whatever the length of stay - be it a night, a month, or a year.
It is as much an exciting, eclectic, boldly designed new destination for guests coming for just a few days as it is a London bolt-hole for those who moved to the country during the pandemic or international visitors needing a place in London to call home. Offering ‘Club Flats’, a Private Club for residents and hotel services, it is the first of this type of accommodation that the UK has seen.
Well done, how are you using technology to enhance the experience?
Central to the experience is the app we have created for The Other House, this will allow guests to check in, call the lift, provide mobile key door entry, order drinks, and even see if the gym is busy... It takes a lot of hard work to create it, but it is a game-changer. People don’t have to use the app if they don’t want, but generally, people are so accustomed to using their mobile phones now, scanning QR codes, and text communication, this is the future.
So given that we began this ten years ago, we were well ahead of the curve, but I think that our concept might have been too disruptive if we had launched before the pandemic. Now it all makes sense, people are combining work with leisure, taking fewer but longer trips, and being more environmentally aware, these trends all work for The Other House.
The tech sounds cool for guests, does it create operational efficiencies?
Because we are new we can create everything as we need, there are no legacy systems we need to integrate. We have eliminated a lot of the labor associated with back-of-house, it is a very efficient and intelligent system that smartly utilizes information to help us with everything from staffing to ordering supplies and marketing.
Having toured the space with you seems like the property is efficient with the real estate, too. Tell me about that.
We have eliminated some of the dead space in typical hotels, our lobby is quite small deliberately and we have made it flow into the restaurant and bar areas. We also know guests that come to London want to enjoy a variety of restaurants in the locality, and the Club Flats in The Other House also have their own kitchenette so we have done two things, we have kept our main in-house F&B to one all-day restaurant and created = a non-intrusive area for people to get food delivery. By doing this, we have been able to cut down on back-of-house kitchen space. By offering a “housekeeping lite” option––we do a deep clean for guests once a week with light touch-ups as requested––we have also cut down the back-of-house space needed for housekeeping as well as running more sustainably. .So our operational footprint is quite efficient.
The guest rooms are beautiful and you pack so many amenities into them, yet none are larger than about 550 square feet and most are under 300 square feet. How?
Thank you. The design, with our fantastic partners, Bergman Design House, is really clever. We have created club flats with these beautiful metal screens that evoke foliage to divide the spaces but allow for light and air. By dividing the space, we can fit in all that travelers need and want to be comfortable: a sitting area, a small kitchen, and a quiet and separate sleeping space.
There are many configurations of Club Flats, including the Club Originals, Club Class, Club Vaults, and Club Collection – all-embracing the period architecture of the buildings they are within. They range from studio-style flats to three bedrooms, 247 sqft to 656 sqft. For larger groups, there are Club Combos - options to interconnect two, three, or four Club Flats all behind a single front door or around a private internal courtyard - up to 1,238 sqft.
Overall, the design of the property is also quite environmentally conscious as well?
Yes, our commitment to re-designing and refurbishing tired historic buildings is of huge environmental benefit. We are aiming to achieve the BREEAM ‘Excellent’ category, representing only the top 10% of buildings, we have implemented sustainable design solutions at all levels using construction materials with a low environmental impact and lifecycle assessments to inform selection. Synthetics and chemicals have been avoided and the use of either recycled or recyclable materials was prioritized throughout the property.
Let's talk about the labor shortage, how has it been getting staff?
We have built an amazing team mostly through word of mouth. We will ultimately have a team of around 70 at the Residents Club. As people join the team, I explain they are going to be part of something really, really exciting. It’s a new idea, it’s going to be disruptive, and we are going to reshape the market. . we are creating our own rule book, this isn’t a normal property opening.
What happens when something doesn’t go to plan?
We have had a lot of nerve-wracking moments with this project, but that is to be expected. When things don’t go to plan, I will do everything I can to make something happen. I am not a person that takes “No” for an answer, I am solution oriented. If there is a roadblock, then we try to find a way around it. What I quite often find is that if there is a way around it, it is potentially better than what we had planned.
Why are you even doing The Other House? You already built a successful property business in London.
The opportunity to reshape the hospitality market, to create a new segment, is fantastic to me. I love LCP, I am still Chairman and Non-Executive Director, but The Other House came out of LCP, this is business evolution. There is a market for something new and we are creating it to meet the demand. It is immensely exciting! We are breaking the mold.
Fast forward five to ten years, how do you see growth for The Other House?
We will own and operate the businesses, we have already had inquiries about franchising, but we will be an owner-operated business. This is already quite different as many operators don’t own the property or brand..
Do you worry about the competition?
There will always be competitors of some sort, but the idea of Club Flats, with a club, flexible stay all brought together is something unique. Certainly, the serviced apartment sector realizes they need to offer more amenities and lifestyle features, and hotels need to give guests a greater sense of place but we are ahead by having a purpose-built facility and streamlined operations. In fact, we are creating a new sector and want others to follow- this will be a true mark of success.
Well, I am completely blown away! How are you going to get the message out about the property?
We are going to sprinkle a bit of stardust through our PR and marketing and with partnerships with some well-known Londoners. We have already seen that the private club will be sought after by locals and we have some great programming planned that is a cross-section of literature, the arts, wellbeing, and the culinary world. We are positioning the brand as aspirational but not untouchable.
Thanks for taking the time, Naomi, wishing you lots of success!