Big hotel property play


New Zealand’s largest property fund management company hopes to start building a luxury Queenstown hotel about next May.

NZX-listed Augusta Capital recently paid $13.95 million to acquire a newly-cleared site immediately above the Queenstown CBD.

The vendor, developer Kevin Carlin’s South Island Investments, bought two Man Street sites last year, one on the Brecon St corner, and received resource consent for a five-star hotel designed by Auckland’s Ignite Architects.

Augusta’s price includes about $9m for the land, with the balance reflecting the design work, intellectual property and site works undertaken to date.

Auckland-based Augusta managing director Mark Francis, who founded the company in 2001, says there’ll be a slight redesign of Carlin’s plans for the five-storey building, plus base-ment. That will be partly influen-ced by whoever’s chosen as the hotel operator.

“The good news is there’s really strong operator interest in the site, so getting an operator is not going to be the hard part, that’s for sure,” he says.

Once the tweaks have been made, it’s likely a resource consent variation will be sought.

What’s proposed are 47 studios, three corner suites, six suites and one penthouse. The fifth storey includes the luxurious penthouse and several suites with large balconies and expansive views.

There’ll also be a main restaurant, piano bar and cocktail lounge, 150-guest function room and onsite carparking.

Francis comments: “Locations for a hotel development in Queenstown do not come much better than this site.

“The location is central Queenstown within easy walking distance of all the key sights and eateries in the Queenstown CBD while sitting in an elevated position which provides premium, uninterrupted views out to the Remarkables.”

The project, labelled ‘Queenstown Views’ by Carlin, will be the first within the rezoned ‘Queenstown Town Centre’ area.

Francis says “we started talking to Kevin over a year ago”.

Carlin had planned to sell off individual apartments, “but he unwound those sales to pursue the hotel option”.

“There’ll be a branded hotel operator, but we’ll own the real estate.”

Francis says the property will be transferred in the new year to Augusta’s proposed unlisted tourism fund.

Its aim is to capitalise on the acute shortage of hotel accom-modation across NZ, with a focus on Auckland and Queenstown. He confirms the development cost, including land, won’t be dissimilar to the $65m suggested by Carlin.

A year ago, Francis told a website, “We’re not afraid to take on big opportunities.

“We like to bite off more than we can chew.”

He also noted: “Queenstown and Auckland is where all the action and growth is in NZ, so those are two spots that we’re looking at very closely, both for tourism and residential.”

Francis hopes to start the Man St project in about May, with construction likely to take two years – Carlin’s company is being retained in a consultative role.

Francis says he’ll also look at pursuing Carlin’s idea of a covered escalator for the Brecon St steps opposite.