KEY POINTS:
Less than a month before the 1987 stock market crash, a newly formed property firm, Acadia Corp, sent a wrecking ball into the Royal International Hotel.
The hotel was the flagship of beer giant Dominion Breweries. Its interior was decorated by Lady Kelliher, wife of DB managing director Sir Henry Kelliher, and it hosted the Beatles in 1964.
But its passing was not lamented. Instead - and in keeping with the spirit of the time - the Herald marked its destruction with a terse picture-caption, noting that the building would make way for a "commercial development".
Acadia planned a $120 million, 32-storey office tower on the site - bordered by Elliott, Victoria and Albert Sts - due to open in 1990.
But after the crash, the site was turned over to carparks as a succession of developers floated and then abandoned their dreams. It is now used for a reverse-bungy ride.
Acadia was taken over by Sir Ron Brierley's BIL, which sold the site to Colin Reynolds' Chase Corporation. In those days, all self-respecting companies called themselves "corporation".
Chase wanted to install its retail subsidiary Farmers Trading Co on the ground floor. Above that it planned an office tower connected to Chase's Finance Centre by a sky-bridge across Victoria St. It was to be New Zealand's version of London's Canary Wharf.
Just a few months after Chase revealed its plans, the Government placed the firm's property arm under statutory management, a move that marked the startof its spectacular demise.
After Chase, the site fell into the hands of an Indonesian firm before it was bought by the present owner - Korea's DaeJu - for $25.5 million in 2003.
With such a history, it is only prudent to take with a grain of salt DaeJu's plan - a 67-storey, $450 million retail and apartment complex known as the Elliott Tower.
Privately owned DaeJu, which has interests as diverse as finance, shipbuilding, media, and property, only this week applied for resource consents to build the skyscraper. And it has yet to decide how it will pay for the development, who will build it and when work will start. But it insists the project will go ahead.
"We believe the residential market in New Zealand is slow at the moment, but it will return in a couple of years' time," said DaeJu's New Zealand managing director, Jeong-Moo Sohn.
So far at least, the 232m tower, which will be the second-tallest building in New Zealand after the Sky Tower (327m), has been well received.
DaeJu is aiming at the top end of the market. The cheapest apartment will be about $320,000 and the most expensive could go for as much as $7 million.
The tower is designed by Auckland architect Gordon Moller, who also designed the Sky Tower.
He won the commission in an international competition that included luminaries such as Britain's Norman Foster, designer of London's Gherkin and the British Museum's Great Court.
There will be 259 apartments ranging from 64 sq m studios to a 590 sq m penthouse. Each unit will span the 20m width of the tower on two levels - one floor looking west and the other east.
"You get views on both sides, instead of having dark rooms at the back of the apartment and no view," said Moller. On the west will be the upper harbour view and the afternoon sun and on the east the prospect out to Rangitoto.
The glass and aluminium tower will be split into three distinct sections by two "sky gardens". Moller has also tipped his hat to environmental concerns, specifying a co-generation plant and topping the tower with solar panels.
"The design intentions have been to create an iconic and elegant tower, which complements the surrounding fabric and sits well with adjacent tall buildings, particularly the Sky Tower," Moller said.
Property experts are generally confident DaeJu will find buyers.
Jones Lang LaSalle national director of valuation and advisory services Dean Humphries says the development will begin to satisfy the growing demand for apartments from owner-occupiers.
These are people who balk at the high house prices in suburbs such as Mt Eden, Parnell, Ponsonby and Herne Bay, but are reluctant to make the compromises that come with living farther away - the commuting and the distance from central city nightlife.
Properties east of Queen St also fall inside the Auckland Grammar School zone, increasing buyer interest.
It is a market developers have not served well.
Since 1991 more than 150 developments have been built in the Auckland CBD and peripheral areas, the equivalent of over 15,000 units.
Of these, 12,000 are in the CBD and more than half have been built in the past four years, are under 60 sq m and priced at less than $400,000.
These are apartments for investors - the mums and dads who look on an apartment as a superannuation scheme - who until recently have represented 60 to 70 per cent of buyers.
Smaller apartments have been hit by the slowdown, while higher-quality larger stock has held up.
"There have been only a limited number of good-sized, owner-occupied units released in the CBD in the recent past," Humphries said.
High-end realtor Bayleys says the owner-occupier top end of the CBD apartment market is quite strong. Communication manager Neil Prentice said: "We've sold over $20 million worth of apartments in the Viaduct this year, including three large apartments in the Lighter Quays complex for over $3 million each."
Martin Dunn, head of City Sales, a specialist apartment agent, said the price would test the market.
"The appetite for such quality is uncertain, but I would love to see it happen."
He said the development could encourage people sitting on small $1 million properties in the fringe suburbs to move to the city.
"The market we have been waiting for is a true suburbs-to-city market. If people spend $1.2 million [in the central city] they can really live like kings."
The tower will not be finished until 2011. DaeJu wants it ready in time for the Rugby World Cup.
But CB Richard Ellis research director Zoltan Moricz reckons the wait may be in its favour, as the wider property market is bottoming out.
"It could arrive in time to catch the next upward phase of the cycle."
Sohn said the firm was investing in New Zealand because DaeJu's chairman, Jae-ho Huh, had fallen in love with the country over the course of several visits.
Moller, who has worked with him for some time, said: "Chairman Huh is a very strong-willed character, a very strong-willed man, and obviously if he likes something or he takes something on, he likes to be involved in it."
DaeJu builds 10,000 apartments each year and last year made sales of $2.8 billion. In Auckland it owns sites on Hobson St, Victoria St and Greys Ave as well as the old Auckland Star site on Shortland St. On this property, also vacant since the sharemarket crash, it plans either a 200,000 sq m office tower or apartment complex.
Businesses surrounding the proposed tower also seem enthusiastic. But they are a little concerned that construction could drive shoppers away.
Bruce Wilson, a pharmacist in the Strand Arcade, said: "It will be good for business, it will bring more people into the area. There has been a migration to the Viaduct and we would like to see this area revitalised."
Some, however, resist the change.
One passer-by wanted the site to remain as it was.
"It's hard enough to find a carpark in the city," he said.
The developers hope this will be a minority view.
The Developer: Daeju
* Korean conglomerate owned by the Huh family.
* Sales in Korea alone of $2.8 billion.
* 3000 employees in Korea.
* Owns six sites in Auckland.
The site
* A 4417sq m block bordered by Victoria, Albert and Elliott Sts.
* Former site of Dominion Breweries' Royal International Hotel.
* Acquired from DB group by Acadia Corp.
* Acadia acquired by BIL mid-1987.
* BIL sells property to Chase Corp in 1989.
* Chase sells property in 1991 to Indonesia's Colwall Properties.
* Daeju buys property in 2003.
The Elliott Tower
* Height 232 metres.
* Cost $450 million.
* 67 levels including six of carparks for 546 cars, three of retail and 57 residential levels.
* 259 apartments ranging in price from an estimated $320,000 to as much as $7 million.
* 880 residents, 550 building and service workers.
* Construction: 2007 to 2011.
* Architect: Gordon Moller.
