From army surplus to city star
Still-to-be-built 28-storey Doyles on Hobson is for sale, writes Colin Taylor
Aplanned new 28-storey Auckland city hotel on Hobson St, across the road from the Sky Tower, is being offered for sale as a completed “turnkey operation” for the purchaser.
“Plans have already been submitted for consents to construct a 208-room hotel to be called Doyles on Hobson,” says Nick Thompson of Bayleys Auckland who, with fellow tourism specialist Paul Dixon, is marketing the land and proposed fourstar-plus hotel at 66 Hobson St.
The freehold 484sq m site and conceptual building feature in Bayleys’ latest Total Property portfolio magazine with a deadline for expressions of interest closing at 4pm on November 29.
Dixon says Bayleys expects to receive interest in leasing the new hotel from big global hotel management brands looking to establish or increase their footprint in the Auckland market, as well as from New Zealandbased hotel operators.
For more than 30 years, the site has been the retail premises of an army surplus and outdoor clothing and equipment store.
Demolition work on the dated four-storey building on site is scheduled to begin early next year, with construction starting soon after, and completion of the new hotel planned for early 2020.
The 484sq m site directly fronts on to Hobson St with current architectural configurations having room sizes ranging from 23sq m to 30sq m.
“Working with the developer at this intermediary stage of the project will allow the successful new owner of the site to have an influence over some aspects of the look and feel of the finished hotel — including aesthetics, decor, and amenities,” Thompson says.
Dixon says consents applied for the Doyles on Hobson hotel concept accommodate a coffee outlet on the ground floor, with separate restaurant and bar on the first floor, and guest leisure amenities like swimming pool and gymnasium.
“Various meeting and function rooms are also on the plans to cater for demands from both the business and corporate sectors,” he says.
“The new hotel will be just 100 metres from the National Convention Centre now under construction and is also due for completion in 2020. It will also be a short downhill walk from the Viaduct hospitality precinct.”
Thompson says international hotel operators have “a voracious appetite” for new properties in Auckland — driven by the destination’s constantly rising visitor numbers.
“Over the past two years, during the peak season, October through to March, Auckland’s bigger hotels recorded average occupancy levels of
87 per cent — allowing hoteliers to really drive up their advertised rack rates, and push inbound operators harder for block booking discounted rates,” Thompson says. “Average daily rates are now at $206 for the year ending September 2017 — an increase of 17.3 per cent from the previous year. That bullish approach to the tourism sector has underpinned not only the construction of several new hotels in the CBD, but has also driven the refurbishment and conversion of existing building stock.
“Already this year, Bayleys has negotiated the sale of part of the former New Zealand Herald site on the corner of Albert St and Wyndham St, which has been sold by Manson Properties to Australian-based Pro Invest.”
The Sydney-based boutique property investment firm plans a
500-room hotel for the site to be operated by InterContinental Hotel Group and dual-branded under the Holiday Inn Express and Even Grande marques.
Dixon cites a just-released report by New Zealand Trade and Enterprise, entitled New Zealand Hotels — an Attractive Time to Invest, which reports that, “a highly constrained [Auckland] hotel sector has resulted in competition for rooms”.
The report says more pricesensitive domestic demand has been replaced by higher value international guests, resulting in further increases to average daily rates and revenue per available room. “Annual demand for [Auckland] hotels is forecast to increase to over 4.1 million room nights by 2025. This represents an increase of 45.5 per cent over the March 2017 year-end. Supply is slowly responding to the rapid increase in demand. However, there is still a significant lag in the supply of new rooms.”
The new hotel will be just 100m from the National Convention Centre. Paul Dixon