Update: After questioning the apparent cost of $1 million/room for this proposed hotel, I’ve been told the hotel construction cost would be more like $140 million. That works out at $700,000/room, still expensive but closer to the $582,000/room Fu Wah is estimated to have paid in January for the Hyatt Hotel in Melbourne.
Other costs would include fitout, land use payment, consultants, financing, landscaping and a new public promenade out the front of the hotel.
Despite the separation of costs, most of those ancillary costs would be factored into a hotel purchase price – so the $1 million/room figure remains valid.
Neither Waterfront Auckland nor the council has disclosed any detail about how the leasehold element has been handled.
Fu Wah thinks expensive – but $1 million/room for Wynyard Quarter hotel?
The Beijing company named as winner of the right to build the 5-star hotel planned for the Team NZ site in the Wynyard Quarter, Fu Wah International Group, likes expensive – but probably not as expensive as the $1 million/room being quoted yesterday for its first New Zealand venture.
The company bought the Hyatt Hotel plus an adjoining parking lot in Melbourne for about $A135 million (about $NZ145 million) in January. Savills estimated the sale equated to just over $US502,000/room, or about $NZ582,000/room.
Fu Wah has been selected in a process that was to have been finalised in December, with an announcement after the board meeting of Waterfront Auckland, was semi-confirmed at the beginning of February when Fu Wah executives were in Auckland, still requires Overseas Investment Office consent but was subject of selective mayoral confirmation yesterday.
Details were slim: 200 rooms, $200 million – a combination which, on international standards, is unlikely but could be possible with conference facilities – and a start next year for completion in 2017.
The development is on leasehold land owned by Auckland Waterfront, but the council-controlled agency has worked to turn ownership structures into semi-freehold arrangements, as was done with the ASB Bank headquarters across the road, where developer & owner Kiwi Income Property Trust secured an agreement to pay the initial 90-year term of ground rent via one upfront payment of $15.9 million.
Fu Wah was established in Hong Kong in 1988, has had a strong focus on Beijing for 20 years but, like many Chinese property investors & developers, has turned to foreign markets in the last 2 years.
In Beijing, it has a number of high profile properties – the private Chang An Club and high-end commercial street, Jinbao St, which connects the core commercial area of Wangfujing & the cbd. It owns numerous luxury hotels, clubs, high-end shopping malls, class A office buildings & serviced apartments.
Attribution: Company information.