Qui Vive: The Model for a Designer Hotel
In October 2020, interior designer turned property developer Sean Cochrane obtained planning permission from Hastings Borough Council to develop 44 Havelock Road for short term residential accommodation. The seven-storey building was once a telephone exchange and was then bought by the University of Brighton as prospective student halls of residence. Cochrane’s plan was to refurbish it as self-contained studios during term time for students of East Sussex College (just round the corner). In holiday periods, particularly over the summer, the studios could be re-let to tourists.
Cochrane’s financial model, whether consciously so or not, echoed the hotel developments pioneered by a certain Donald Trump in the USA: obtain the capital funding for redevelopment by selling long leases of lettable rooms in advance to ‘investors’, who are offered a shared revenue agreement to divide up the future income. It’s a model which spreads the capital risk, but requires good working relationships between the developer, the leasehold buyers and the managers of the subsequent lettings.
There was no marketing of the Havelock Road development locally. One has to assume that Cochrane did not want to diversify his product by crowding it with leasehold owners who might take up permanent residence. On the contrary, the rooms were offered through national agency Residential Estates as ‘buy to let’ investments with full property management services and built-in demand for short term lets: students plus holiday tourists – what could go wrong?
ONSET OF COVID
The progress of the refurbishment was held up by the Covid-19 pandemic, and its initial prospectus shifted. It became clear that, whatever might have happened in a parallel world unaffected by Covid, there was not, in the aftermath, enough demand for accommodation from College students, most of whom continued to live at home. Accordingly, while some student studios remained, most of the 97 rooms – still owned legally by the investors but subject to letting agreements with one or more of Cochrane’s companies – became subsumed in a year-round hotel marketed under the brand name Vive.
The promotion on TripAdvisor was gushing: “A slice of luxury on the South Coast. Ideally situated in Hastings Town Centre, just 0.2 miles from Hastings Train Station with local Cafes, Restaurants, Bars, Shops, Beach, Pier and Historic Old Town just a short walk away. Designed and built in 2022 by the award winning Interior Design Company, Cochrane Design, who boast an impressive portfolio, including the W hotel and Ibiza’s iconic, multi-award-winning Hotel Es Vive. VIVE offers sleek, contemporary, stylish studio rooms each complete with small fitted kitchen and luxury en-suite shower room.”
But demand was still seemingly insufficient. In May 2024 Cochrane applied to the Council to extend planning permission for the hotel rooms to accommodate not only students and tourists, but also be used for temporary/emergency accommodation for the homeless. Unsurprisingly, given the severe shortage of housing of this sort in the borough, the Council planners made no objection. But there seems, in fact, to have been no take-up by the Council’s housing department.
So was the financial collapse inevitable? According to one of the investors, Linda Howes, a qualified surveyor with her own long experience in property development, Cochrane has admitted that the refurbishment costs ran dramatically over budget (she says he told her the loss was in the region of £1.75million). Breaches of contract in both the sales agreements and in subsequent letting agreements are alleged. The perception is that there has been an apparent muddling of management accounts.
Who, if anyone, is at legal fault, may take time to resolve. In the meantime, yet another building in the centre of Hastings remains largely unoccupied.
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