09 Oct 2023
Words John Miller Informer 108

A Bias For Beds

Hotel TOTTO in Wollongong announces the bold debut of Pi Capital Partners in the hotel space. Principals Nick Potter and Jack Shaw share their vision for the hotel, the TOTTO brand and Pi Capital.

Pi Capital Partners
Principals Nick Potter (right) & Jack Shaw (left)

Pi Capital is a relative newcomer in the hotel industry, having only started in earnest in 2020. In quick time, the Sydney-based private equity real estate group has radically transformed the dour former University of Wollongong-owned accommodation into the stylishly modern 150-key Hotel TOTTO.

The renovation was as extensive as it was expeditious. Pi only commenced refurbishment of the premises in June last year.

By January, Hotel TOTTO had flung open its funky new doors with a soft opening and become an instant hit, reaching its capacity most weekends. 

The hotel marks Pi’s first foray into the hotel space, which begs the questions, Why Wollongong? And why this asset?

“The short answer is we saw value,” explains Nick Potter, who heads up Pi with business partner Jack Shaw.

“It’s how we look at opportunities. “We look at real estate with no rules, except we have a bias for beds.

“That means we’ll look at anything we can put accommodation into and then decide on a risk-reward basis what the best use of the real estate will be. Is it a hotel? Is it build-to-rent? Is it co-living? Is it serviced apartments? Or do we blend some of those uses together?” 

With Hotel TOTTO, Potter says Pi went through an extensive process of assessing its options. One possibility was repositioning the asset as revitalised student accommodation.

Another was converting the site to medical use. In the end, and with support from the local Wollongong community, Pi decided the property’s optimal use would be a hotel.

“For us, it’s whatever the best use for the property is,” says Potter. “By the time we went through the supply-and-demand dynamics of the Wollongong market, we decided the best use would be as a hotel. We’re agnostic within the bed sector, it’s just about what works best.”

Hotel TOTTO returns the site to its original use. The building was originally conceived as apurpose-built Ibis hotel, which opened in 2006.

The University of Wollongong purchased the site from owners Accor in 2011 and repurposed it as student accommodation, naming it Marketview in keeping with its Market St location in central Wollongong.

Now, as Hotel TOTTO, the property joins tourism and leisure conglomerate EVT as part of the Independent Collection by EVT, becoming the 14th hotel to do so.

“We had two major work streams going on,” says Potter. “One was the aesthetic refurb of building. The other was bringing the building back up to code.

“For the refurb, we reclad the exterior and gutted the rooms. We basically rebuilt it so that it looks and feels like a brand-new hotel. 

“So, new rooms, new bathrooms, new air conditioners, new IT and a beautiful new lobby we’re really proud of.” 

Since opening, Hotel TOTTO has earned solid ratings on travel guidance platforms and OTAs. The hotel enjoys a 3.5 rating on TripAdvisor and a 7.9 rating on Booking.com, which climbs to 9.1 when rated by couples.

“Ultimately, we target all segments,” explains Jack Shaw, Potter’s co-principal at Pi. “We’re trying to appeal to a wide cohort, be it leisure or business travel. We get a lot of sporting and entertainment travellers coming down from Sydney and staying with us as well. So, it’s a very diverse crowd. The only limit is the physical size of the rooms, but we think our architects, Place Studios, have done an amazing job of maximising the space.” 

Part of TOTTO’s success is the hotel’s signature restaurant, Basta Trattoria, a smart-casual 135-seat Mediterranean-inspired restaurant. Shaw says once it was decided the premises would be a hotel, the restaurant became an integral part of the equation, both in terms of the services offered and the aesthetic.

“We’re really pairing a lifestyle select-service hotel with a quality F&B offering in its own right,” says Shaw. “In terms of how we designed the lobby, we didn’t want it to feel like you were pulling up and checking into a hotel,” adds Potter. “We wanted it to feel like you were turning up to a bar and have people saying, ‘Wow, what’s all this exciting activity happening here?’ Part of the reason we have a coffee machine right at the front is we’ve tried to shape the look and feel of it as a continuation of the bar into the reception desk.” 

Shaw says the streamlined integration flows through to how the hotel is managed by staff on a day-to-day basis.

“In terms of the way we designed the building it was really about trying to minimise the amount of labour as well,” he says. “Our staff float between helping with the F&B and check-in at reception. We have self-check-in desks, so while someone is checking in via the kiosks, they can be getting made a coffee or having a beer pulled depending on what time of the day it is. We have some real efficiencies around that, while also creating a point of difference with the sense of arrival.” 

Pi’s bias for beds stems from both principal’s backgrounds. Potter is a 20-year real estate industry veteran with multi-disciplinary experience in asset management, property valuation and property development. 

This includes almost four years in London working as chief investment officer of FCAregulated investment manager

MSS Real Estate, and eight years at Cushman & Wakefield in Sydney where two of his areas of focus were student accommodation and co-living.

Potter started Pi Capital in 2010 as a side hustle while at Cushman & Wakefield before formally hooking up with Shaw in 2020. Shaw brings over ten years of hotel experience to Pi having worked for 2T Tourism Asset Services, Mantra Group and Pro-invest Group where he spearheaded the Holiday Inn Express platform immediately prior to joining Pi.

“We’ve spent a lot of time in student accommodation and co-living, and I guess we wanted to bring a little bit of those elements to Hotel TOTTO as well,” says Potter. “The word ‘totto’ comes from our time in co-living. It’s a derivative of the Latin phrase ‘in toto’ which means ‘altogether’. 

“We look at the asset holistically, not just as a place to stay, but as somewhere to relax, somewhere to have a good time, somewhere to have a meal, somewhere to have a drink. As we further develop the asset, we’ll look to lean into those elements more. We’re looking to bring an element of co-working to it as well, some boardrooms, some kitchenettes and the like to appeal to some longer-stay guests. We’ve also got plans to potentially put a cinema out back. So, we’re really looking at this as a living, breathing asset rather than just a hotel.”

Also included in the hotel’s branding, albeit subtly, is the pi symbol, π, which is carried into the double t in TOTTO.

“It’s a nice touch and our little overlay onto the brand,” says Potter. “It reflects how Pi Capital puts deals together, which is to find the right people, the right property and then work towards profit. Pi in microeconomics is shorthand for ‘profit’. That’s ultimately what we’re all about.”

As for the future, Potter and Shaw aim to turn Pi Capital into a market-leading asset manager of real estate. They say they have been buoyed by the success of Hotel TOTTO and potentially want to develop the brand in other key Australian cities.

“When we partnered with EVT, they loved the brand and thought we could do something special with it,” says Potter. “We’ve been pretty delighted with the outcome to be honest. 

“So far, it’s been really well received and we’re looking to do a grand opening soon,” adds Shaw. 

“The restaurant’s reception from the local community in particular has been really positive.

“It has seen really good local capture, we’re doing a lot of activation on Friday and Saturday nights to bring in local clientele.

“We’ve just been named as one of the top restaurants in Wollongong in pretty short order.” 

Pi will continue to explore other real estate opportunities, including co-living and build-to-rent, with the group’s customary bias for beds.

“There’s a number of opportunities we’re looking at now where it would be great to put a couple of those uses together,” says Potter. “Part of the reason Jack and I got together is that I saw co-living and build-to-rent as the hotelification of residential in terms of overlaying that service level to it. I wanted to get a smart operator in the hotel space and found it in Jack.

“We both live and breathe this stuff. When you immerse yourself in something, and enjoy it like we do, it makes things a lot easier. We’re just loving what we’re doing day-to-day at the minute. It’s highly scalable what we’re doing and the sky’s the limit.” END