Forsyth Barr building eyed for new hotel

CATHERINE HARRIS
Last updated 10:08 29/06/2014
Forsyth Barr building
 

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International and local interests are considering turning Christchurch's badly damaged former Forsyth Barr building into a hotel, as the city gears up for next year's Cricket World Cup.

Colliers International says it has had interest from both overseas and local players in converting the damaged office block into a 200-room, 4.5 to 5-star hotel.

The building is next to the proposed new Christchurch convention centre site and well configured for hotel rooms, says Collier's national director of hotels, Dean Humphries.

"My understanding is it is repairable, " he said.

The building is owned by a local Christchurch consortium and any conversion would be in addition to the hotel being planned for the convention centre, he added.

"We've had quite a number of international hotel operators register their interest."

Christchurch lost at least 2500 of its nearly 4000 hotel rooms during the earthquakes, and so far only about 500 have been re- introduced, mainly repair jobs, Humphries said.

However, Christchurch - like other main centres - was enjoying a resurgence in interest from hotel operators.

A new 4.5 star, 138-room hotel had been opened by Rydges in Latimer Square and the former All Seasons hotel in Cashel St was likely to reopen as a 270-room, 3-star hotel at the end of this year.

It was a fine line for four and five-star players because New Zealand's room rates and revenue were comparably low.

"Until we can get revenue and room rates up, and returns up, it's still going to be pretty challenging to get most of these projects off the ground in reality, " Humphries said.

It was not well understood that top names such as Marriott and Hyatt were only operators, and reliant on investors to do the building because existing hotels were tightly held.

Nevertheless, hoteliers were eyeing New Zealand's historically high levels of hotel occupancy, strong tourism numbers, the loss of rooms in Christchurch and a lack of new hotels since the global financial crisis.

Auckland would likely reach full-room-night capacity during the peak tourism season as early as next summer.

And the increasing number of events such as the 2015 Cricket World Cup and the Fifa Under-20 World Cup were making global hotel names take note.

Ritz-Carlton and Four Seasons were rumoured to be looking at Auckland, as was Starwood, which owns the Sheraton and Westin chains.

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Three hotels were sold in the first half of this year, compared to just one in the same period last year.

One was the All Seasons in Christchurch to the Russell Group and another was the Travelodge Palmerston North, a 4-star 85-room hotel with conference facilities, to the Distinction Hotel Group for an undisclosed price.

In Queenstown, the 90-room Shotover Lodge went for $6.7 million to a private party.

Given the cost of new builds, hotel conversions were "flavour of the month", said Humphries.

In Auckland these included the 130-room Sofitel So hotel in Auckland's Custom St East, and a 130-key 4.5-star Adina apartment hotel within the QuBA apartment complex near Vector Arena.

"There is also a possible conversion in the works of a 20-level office building located at 396 Queen St to a 3.5 to 4-star 200-room hotel, " Humphries said.

Other more medium-term proposals included the 5-star hotel planned by Chinese developer Fu Wah on Auckland's waterfront

- Sunday Star Times

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