International hotel group buys Cathedral Square site for new hotel

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A major Japanese hotel and tourism group has bought land in Cathedral Square for just over $7 million to build a big hotel. The 2000sq m vacant property runs from Cathedral Sq to Gloucester St. It is part of the former Press site.  The deal has been called a vote of confidence in Cathedral Square, which has been a slow starter in the rebuild. The project will bring the number of existing and planned hotel rooms in the central city to about 2500. Christchurch lost more than three quarters of its 3700 hotel rooms in the earthquakes.

Former owner Canterbury Property Investments had been struggling to develop their own hotel on the site when the company was approached to sell, said director Miles Yeoman. Confidentiality agreements mean the hotel group’s identity has not yet been disclosed. It is understood to be new to Christchurch and will own, build and run the hotel.  “I understand they are going to move fairly quickly to build a big hotel,” Yeoman said. “We’re disappointed we couldn’t make something work ourselves, but this is great news for Christchurch, and for that part of the Square.”

Noel Gilchrist from commercial real estate firm Colliers, who brokered the deal, said the hotel would be “significant”, and would cover the whole site. Council rules mean the building could be up to 28 metres high. “They are working on the hotel plans. They like the site and it will be large-scale,” he expected the hotel would be “at least five-star”. The sale was settled on Wednesday. The $7.1m price was nearly double the $3.598m Yeoman’s company, Canterbury Property Investments, paid for the land in 2014.

The new owner is the properties fourth since the earthquakes. Development plans including an office building, a replica of the former Press newspaper building, and a Quest hotel have been proposed and abandoned in that time. The land is now used for car parking. The news follows last month’s announcement that developer Nexus Point will build new offices for telecommunications company Spark on the former BNZ House site. Gilchrist said the hotel news signaled confidence not just in Cathedral Square, but in the whole central city.

“It’s a vote of confidence of what is happening. We are getting a convention centre, the library is going in, and there are new office blocks going up. It gives the purchaser confidence that they are in the right place. “Add to that the tourism boom, and the fact that we’re short of hotel rooms. This is a good outcome all round.” He said that despite the amount of vacant land in the central city, sites suitable for top-class hotels were scarce as the operators wanted an outlook over a park, square or river. “Christchurch is on the radar of overseas buyers because New Zealand is a popular destination from Asia. We’ve been contacted by a number of hotel chains wanting sites for hotels.”

What about the other Hotels?

  • Already under way in Cathedral Square is the conversion of the former Millennium Hotel into Distinction Christchurch hotel. It should open by early next year.
  • The former Forsyth Barr office building opposite Victoria Square is being redeveloped as the new Crowne Plaza hotel, which is due to open this year.
  • A Holiday Inn Express is planned for Gloucester St between Press House and Cathedral Junction.
  • The Millennium chain is understood to be looking for a new site in or around Cathedral Square.
  • The Peterborough hotel will be built opposite Christchurch Casino.
  • Canterbury Property Investments will build a Quest hotel on the corner of Manchester and Southwark streets.
  • An apartment-style hotel is planned for Colombo St just north of Kilmore St.
  • The former Rydges hotel building may be repaired and reopened, but its owners are in insurance disputes.

Source:

  • Liz McDonald
  • co.nz
  • Photo: Iain McGregor

$200m hotel ready for 2018

2732d2a065c325feee5f01f2d26371c5175b91fb_620x311

Prime Minister John Key says a million Chinese tourists will soon be visiting here annually.

Making his prediction at a ground-breaking ceremony for Auckland’s new $200 million Park Hyatt, Key told more than 100 dignitaries in a waterfront marquee how he expected massive growth.

Quipping how he expected to be at the new five-star hotel regularly because he is often at events in hotels, Key said China was New Zealand’s second biggest market for tourists after Australia.

About 371,000 Chinese tourists now visit New Zealand annually.

“The question is ‘how long will it take before there’s one million?” he asked of annual Chinese visitor arrivals. “I would have thought within about three to four years there will be one million tourists from China alone,” he said.

Tourism New Zealand says China is New Zealand’s second largest visitor market.

“Its growing middle-class has seen sustained growth in Chinese visitor arrivals to New Zealand over the last five years. Increased air capacity from the two direct carriers, China Southern Airlines and Air New Zealand – with new players Air China and China Eastern also establishing year-round services in 2015 – has helped this trend,” Tourism NZ says.

Key was with a businesswoman said to be China’s wealthiest to turn the first sod at the site of the new hotel.

Madam Chan Laiwa, founder of Chinese real estate business Fu Wah, visited the Halsey St site in the Wynyard Quarter/Viaduct Harbour area, opposite ASB North Wharf.
She accompanied Key into the marquee to the call of a kaikaranga.

Source:

  • Anne Gibson
  • NZ Herald

 

$200m hotel to start in 2016

2732d2a065c325feee5f01f2d26371c5175b91fb_620x311Work on a $200 million luxury hotel on Auckland’s waterfront will start next year after the project was granted resource consent this week.

Auckland Council’s Panuku Development Auckland branch made the announcement this morning. The building will be one of the largest Chinese investments in New Zealand infrastructure.

The hotel – to be referred to as the Park Hyatt Auckland – will be managed by the world-renowned Hyatt Group and will be built with the help of the Fu Wah International Group, which announced its plans for the hotel in November.

The group will invest around $200 million in the project, with $2.5 million going to the development of a new space for the public immediately around the hotel, which will be located at Wynyard Quarter.

The building will bring an element of extravagance to the area, standing at seven storeys high.

It will have 195 rooms, a ballroom, entertainment facilities, health centre and day spa and will have a total floor area of 29,000sq m.

Panuku Development Auckland’s interim chief, John Dalzell, said having a quality hotel in the city would create a new standard of “premium accommodation” in the region.

“This is a landmark site for Wynyard Quarter and is deserving of a building of the standard the developer and its design team have come up with,” he said.

“It’s great to see it pass this latest milestone and we look forward to the positive impact the hotel will have on the waterfront and the region.”

Prime Minister and Minister for Tourism John Key yesterday praised the new hotel, saying that it would provide a huge boost for local tourism.

Auckland Mayor Len Brown, who is in China, said that such a hotel would help not only to attract the very rich to Auckland, but would also create more jobs in the city’s business district.

“This hotel means more jobs and a strong step into the lucrative but largely untapped high-net-worth individuals tourism sector – which will be a huge benefit to Auckland’s economy and future.”

The hotel will open in 2017.

Source:

  • NZ Herald

Commissioners to decide on SkyCity

NZICC_HobsonStreetView_620x310_620x310A resource consent applications for Sky City’s new convention centre will proceed without the public having a say.

The decision to proceed on a non-notified basis was made by independent commissioners David Hill, Rebecca Skidmore and Kitt Littlejohn.

The three commissioners will decide whether to approve the application in the coming months.

The commissioners considered the environmental effects of the application, as well as the recent decision about the Ports of Auckland Ltd resource consent application, in coming to their conclusion on notification.

The new design, released in May, revealed a smaller convention centre, which will require SkyCity to increase its spend from the $402 million agreed in 2013 to $430 million. The casino company said it might end up spending $450 million-$470 million after earlier saying it might need public money to build a centre for $530 million.

The application, before Auckland Council, is to establish a convention centre as well as an underground carpark with 1415 spaces, a 30-bed hotel, a pedestrian overpass over Hobson St and upgrading the streetscapes on Hobson and Nelson Streets.

The commissioners took into account the recent ruling by Justice Geoffrey Venning in the controversial case of two wharf extensions at Ports of Auckland where the judge said “special circumstances” existed which required public notification.

The commissioner said they did not consider there were any “special circumstances” warranting notification of the convention centre application.

“We are aware that the funding agreements in place between the Government and application have been the subject of public and media interest in recent times, particularly as this relates to the partial public funding of the proposed convention centre.

“However, these are matters of governance and public expenditure that have little, if anything, to do with the environmental effects of a relatively straightforward building project for a public facility in the heart of Auckland,” the commissioners said.

In a statement, SkyCity chief executive Nigel Morrison said the decision is good news for the project and allows the company to move ahead with selecting a construction partner and finalising a date for turning the first sod on the landmark building.

“We now await the final resource consent decision, to be finalised by the independent commissioners over the next few months,” Mr Morrison said

“We are continuing to work towards signing a binding building works contract for the NZICC by October and then commencing construction by the end of 2015.”

The 33,000 sqm convention centre will be capable of hosting meetings of up to 3,150 people, two concurrent events of 1,200 delegates each, and one-off events of up to 4,200 people. The NZICC will be the largest purpose-built convention centre in the country.

SkyCity also plans to construct a new laneway that will provide Aucklanders and visitors with a new public space, featuring shops, cafes, bars and quality signature restaurants like those on nearby Federal Street, he said.

SkyCity is currently progressing the preliminary design of the hotel and, as previously indicated, is exploring options with external investors for the development and future ownership of the hotel.

Source:

  • Bernard Orsman
  • NZ Herald

    “We’re pleased that momentum is continuing to build on the NZICC project, bringing jobs, growth, and much-needed economic investment in downtown Auckland,” Mr Morrison said.

The project

The proposed International Convention Centre will be 38,000 sqm on four levels.

It will include:
• Exhibition space: 8600 sqm of exhibition space for 3500 people in three halls.
• Theatre: To seat 3000 people for presentations or stripped out for large banquets and other events.
• Gallery: A series of bridges connecting people to meeting rooms and theatres across the levels.
• Meeting rooms: 3000 sqm of meeting rooms and breakout spaces. Walls can be moved to adjust the size of the areas.
• Sunset Room: To accommodate up to 1000 people for dinner or cocktails. It will look across the upper harbour and Waitakere Ranges.

SkyCity Convention Centre design unveiled

skydesign2It will be smaller, more expensive and have a reduced capacity – but those behind the International Convention Centre say it will return much the same economic benefits and provide even more jobs.

They also confirmed no new economic modelling has been done since a 2011 report which estimated a $90 million return to New Zealand.

Initial projections of benefits from the ICC were 800 jobs on completion, 1000 jobs during construction and $90 million of economic benefits to New Zealand.

A new design was released today by Economic Development minister Steven Joyce and SkyCity chief executive Nigel Morrison. Visually, it is one level lower than the previous design but the thrust of the changes is around a reduction in size and capacity.

It’s a different convention centre from the one SkyCity mooted in 2011 when it edged out four competing bids to build the centre, winning on the basis of a promise it would cost taxpayers nothing but a change to the gambling law.

The Government signed a deal in 2013 for a $402 million trade with SkyCity – the value of building the centre against the benefits derived from the gambling law change.

But it then found itself looking for a redesign after Mr Morrison said the centre could cost up to $530 million and might need an injection of public money, prompting the Prime Minister to express concerns over an “eyesore” if extra money wasn’t spent on it.

NZICC_HobsonStreetView_620x310Mr Joyce said this morning that the original benefits projected by the Government and SkyCity held true because they were based around a projections of incoming business which had not changed.

“We’re completely relaxed the numbers we have got in front of us today are able to accommodate the sizes that we’re estimated at the time. There is no material difference to the amount of business the centre is able to attract.

“There’s no substantial change to those metrics. From the Crown’s perspective those variations in cost have gone up and gone back but they don’t make a difference because we’re not paying for it. They certainly make a difference to SkyCity.”

In the time since SkyCity was selected, changes have included the value of the convention centre. It has risen from $350 million in July 2011 to the agreed $402m when the agreement was signed in June 2013, to an maximum $530 million earlier this year. It has now been pulled back to a minimum $430 million with a possible top end of $470 million, to be covered by SkyCity.

The size of the centre has also wandered from the 5000 sq m maximum, stated in a memo to then-minister David Carter in April 2011, to the 3500 sq m maximum in the June 2013 Heads of Agreement to the 2850 sq m in the revised design announced today. As well as conventions, the new design could accommodate 4200 people for a single event.

Other changes – which the Government and SkyCity said amounted to a maximum 10 per cent reduction – were a drop from the 10,000 sq m exhibition space heralded by SkyCity in its 2011 proposal Government to 8700 sq m and the eventual 8100 sq m in the latest design.

skydesignThe new design was captured in an updated Heads of Agreement between SkyCity and the Government, which has seen more authority over construction and design handed to the casino company – subject to a line in the sand drawn by Mr Joyce and officials.

“What we’ve done is said, ‘here is the benchmark now and everything will be measured against the benchmark’. The arrangement is SkyCity can’t depart in any material way from this design today. It shifts the balance slightly.”

This means SkyCity will now have to work to the minimum requirements laid out in the updated deal. It will reduce the company’s ability to renegotiate, as it has since the original agreement was signed.

Mr Morrison said design changes, including a laneway between the convention centre and the new hotel SkyCity is building, would lead to an overall increase in jobs, even if there was a slight change to initial projections.

“If it has changed, it’s 1 per cent. I think you’ll find the number of people employed overall will be increased. The jobs will be greater under this scheme than they were previously.”

On the economic benefits, he said if there was any change it was “nominal” and irrelevant.

He said there was a benefit in reaching the agreement announced. “Part of the savings is being able to get on with it and avoiding future escalation.”

The final hurdle for SkyCity is the resource consent, which was lodged with Auckland Council in December. The panel considering the application has the option of putting it out for public consultation – or approving it with its own authority.

Mr Morrision said it was SkyCity’s preference the resource consent not be publicly notified,. “To do this, we need to get on with this.” He said if the plan was put out for public consultation, it was difficult to know how long it would add to the completion date or how costs would change in that time.

Mr Morrison said it was still not possible to know when the convention centre would be finished because the resource consent had yet to be decided. Beyond that, there would be a three-year build period.

There were no current bookings, but about 60 firm expressions of interest had been made.

He said the shift in location for the hotel to land purchased from TVNZ had added to the value of the deal by $28 million, the current value of the land. The sections, on which SkyCity’s hotel will now be located, were bought from TVNZ for $10 million in 2013 for the building of the convention centre.

Told Mr Joyce had called the new design “handsome”, Mr Morrison said: “Better than eyesore,” a reference to John Key’s comments in February.

Mr Joyce said Mr Key had seen the design and was happy with it.

Source:

  • NZ Herald

$200m luxury hotel plans confirmed

HyattViaductBetter_620x310US multinational hotel chain Hyatt has been named as the new operator of a luxury $200 million Auckland waterfront hotel to be developed by a Chinese property group.

PM John Key and Chinese president Xi Jinping unveiled plans for the Wynyard Quarter hotel to be branded a Park Hyatt and in a written statement Madam Chan Lawai, chairwoman of Beijing-headquartered Fu Wah International Group, said she was glad to “commence such a great project in New Zealand. New Zealand has always been friendly to China and is one of the first countries to have signed a trade agreement with China.”

The hotel will be built on the Team New Zealand headquarters Halsey St site, between the distinctive pale Lighter Quarter apartments and the Viaduct Events Centre, opposite the new ASB North Wharf where Halsey St meets Madden St and Jellicoe St.

An application to develop the hotel has been made to Auckland Council, with construction expected to start soon and the hotel to open in 2017, a written statement said.

The six-level 25,000sq m 190-room hotel will have three restaurants, spa and fitness centre, 25m pool and was designed by Singaporean-headquartered architects AR+D working with much-awarded New Zealand business, Bossley Architects. The interior will be by Conran + Partners.

Hyatt was in Auckland for about three decades, managing the big hotel on Waterloo Quadrant opposite Old Government House near the High Court.

4e91af4e1189b5ba1a88a99d49c7a86d75f48401_620x310The Hyatt was re-branded a Pullman earlier this decade. In January 2011, the Herald reported that the Hyatt sign had disappeared from the roof of one of Auckland’s top hotels and after 26 years the property has a new name.

Chiu Yung, Fu Wah president and the son of Madam Chan, said the new hotel would be a landmark on the waterfront and would be built to very high environmental standards. The group will invest around $200 million in the project, with $2.5 million committed to the development of a public space and art display in the area around the hotel in Wynyard Quarter, to give people access to the marina and water.

“The site of the hotel is special – right on the water of one of the world’s finest harbour settings – so we feel a responsibility to build a landmark hotel. The design is one which meets high environmental standards with an emphasis on unique New Zealand features developed in collaboration with the one of New Zealand’s most highly regarded architects. We are thrilled to be involved in a building and hotel of this scale and quality.

“We are very pleased to have partnered with the Park Hyatt brand. We recently invested into their Melbourne hotel. Their commitment to five star excellence dovetails with the market niche that fits a hotel with the significant features of this offering.

“This is Fu Wah’s first investment into New Zealand but we are exploring a number of other projects. We see significant potential and want to be long-term investors in high quality projects. We are grateful we were able to mark the project by unveiling the model at an event involving China’s President and New Zealand’s Prime Minister. This is very much a partnership between our two countries,” he said in a written statement, released this morning.

Larry Tchou, senior advisor, Asia Pacific, Hyatt Hotels & Resorts said the company was excited to share the announcement of a Park Hyatt hotel in Auckland.

“We are grateful to further our relationship with Fu Wah, the owner of Park Hyatt Melbourne, with this new partnership which will bring the first Park Hyatt hotel to New Zealand. Auckland is a key tourist and business destination and we are honoured to collaborate with Fu Wah and Auckland Waterfront for this landmark luxury development.

“This has been an exciting year for the Park Hyatt brand and we are committed to continue to create presence in culturally rich cities like Auckland,” he said.

John Dalzell, chief executive of the Auckland Council-controlled entity Waterfront Auckland, said the five star international quality hotel would be an exemplar project of what the Wynyard Quarter revitalisation is all about.

“The bar was set high with this project: an exceptional design to complement the award winning designs of other buildings and public spaces delivered to date; an investor that was willing to look long term; and an appreciation of the importance of building sustainably.

“Fu Wah has stepped up on all accounts and the result will be a true international standard hotel that, over time, will become a key catalyst for economic activity on the waterfront and the Auckland region as a whole.”

Source:

  • Anne Gibson
  • NZ Herald

$180 million hotel for SkyCity

skycity1SkyCity Entertainment Group is ploughing ahead with growth plans despite a sharp drop in profits, announcing it will build a $180 million five-star hotel in Auckland.

The casino company’s profit for the year to June 30 fell 22.6 per cent to $98.5m after tax.

Revenue declined 4.8 per cent to $821.5m.

Chief executive Nigel Morrison said the result should be considered in light of the high exchange rate and disruption caused by the redevelopment of its Adelaide casino.

‘‘I think at a headline level it’s not great, but I think when you look at it and understand it, there are other factors at play,’’ he said.

SkyCity shares closed at $3.62, up 7 cents.

SkyCity said the exchange rate had led operating profit to slide $9.9m, while the the costs from Adelaide contributed A$4.4m (NZ$4.8m) of the decline.

‘‘Disruption [in Adelaide] has been significant and, to be fair, more than we expected,’’ Morrison said.

Work on the Adelaide casino project was due to be completed by Christmas, he said.

Morningstar senior equities analyst Nachi Moghe said the turnaround at Auckland, which contributes two-thirds of SkyCity’s earnings, was promising for the company.

‘‘I’m picking a better 2015,’’ he said.

‘‘All the refurbishment and restaurants opening up are adding to the appeal in Auckland and Adelaide.

‘‘It’s going expected,’’ he said.

Yesterday’s announcement better than coincided with news the company’s board had on Tuesday signed off on plans to expand the New Zealand International Convention Centre development with the addition of a 12-storey, five-star hotel on land previously acquired by SkyCity.

Morrison said SkyCity’s two existing hotels were experiencing 90 per cent occupancy and earnings from them had risen 17 per cent, so building a new facility to complement the convention centre ‘‘made sense’’.

Morrison said the new hotel would push the total capital expenditure in Auckland to $500m, including already-incurred land purchases and planning costs.

skycity2SkyCity accounts show the new project will push capital expenditure up to a total of $807m during the next five years.

To meet these new costs, Morrison flagged turning some planned projects in Auckland and Adelaide into joint ventures, or the sale of its $35m car parking building in Federal St.

Moghe said the hotel development plans were likely to generate good returns, as the current high occupancy levels showed there was excess demand.

Moghe said the chief question over the hotel development was whether there was sufficient headroom with debt facilities to avoid a future round of capital raising.

‘‘It’s looking tight in the sense that their leverage is going up but it won’t trouble the credit ratings agencies,’’ he said.

SkyCity also said yesterday it had appointed a new chief financial officer. Rob Hamilton, former head of investment banking at First NZ Capital, will start in October.

Hamilton will join former Fairfax journalist Colin Espiner, who this week took up the role of SkyCity’s head of communications.

Source:

  • The Press
  • Matt Nippert
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