First modular-built hotel goes up in central Christchurch
The lease on New Zealand’s first modular-build hotel has sold ahead of the premises opening for business.
Standing at the corner of Colombo and Salisbury Streets in central Christchurch, the five-storey, 88-room property has a 4-star Qualmark rating.
It is to open as the Arden Hotel, following a lease agreement between Christchurch developer Gary Le Pine’s Lepdon Holdings company and New Zealand-based hotel operator Golden Grand Trading.
Golden Grand Trading has committed to a 15-year lease on the property, with two further rights of renewal, in a deal brokered by Bayleys Real Estate hotels and tourism director Paul Dixon.
Dixon says regrowth of Christchurch’s commercial accommodation sector took a protracted hit following the 2011 earthquake.
“Before the quakes there were
3900 three-to-five star branded hotel rooms in Christchurch. After the quake that plummeted to less than
1000.
“Now it’s back up to 2700 rooms, with an additional 400 planned to come on line in the coming 12 months. That’s still lower than before the quakes so there is still plenty of capacity in the market — as identified by Arden’s operator.
“With properties such as The Hotel Grand Chancellor, the All Seasons Christchurch, the Heritage Towers, the two Millennium-branded hotels, the Best Western Clyde, the Holiday Inn City Centre and the Holiday Inn on Avon taken out by the quakes, there has been a hole, which this Arden Hotel will ultimately help fill.”
The 1300sq m hotel, was built in a Vietnamese factory then shipped to the site in 17m double-room and corridor modules.
Shipping took about four weeks, comprising about 7 per cent of the building’s cost. Room modules included all fixtures, fittings and furniture — down to bathrooms and painting.
Data analysis from Bayleys indicates that over the past two calendar years, construction costs on large commercial projects rose between 6-8 per cent annually — cutting into developers’ margins.
But Dixon says the modular construction was 10-20 per cent cheaper than traditional commercial builds. Raw materials cost 30-to-70 per cent less than New Zealand alternatives.
“Electrical cabling was the only component bought here. Arden hotel builder TLC now has two further 200-room hotels to build in its Vietnamese factory for sites in Queenstown,” he says.
“Lepton Holdings had been looking for a prefab manufacturing contractor in Asia as the company simply couldn’t make a traditionally-built hotel stack up financially. Less on-site handling reduced traffic disruption and dust nuisance, while the pre-built sections enabled a quicker finishing of the external facade.”
Dixon says less than 10 per cent New Zealand hotels sustaining a minimum of 80 rooms are on lease agreements.
“Christchurch hotel returns have remained relatively flat over the past seven years — even with the city’s room inventory remaining well below what was available prior to the 2011 earthquake,” he says.
Larger visitor groups are now coming back to the city.
Supporting infrastructure is coming to the fore, such as the new convention centre due for completion at the end of the year is coming.
“The Arden Hotel is part of the wave of tourism regrowth in the city.”