KEY POINTS:
A top international hotel management company has decided to pull out of its management contract at one of Auckland's five-star residential hotels.
Ascott International Management, which manages serviced apartments in the Metropolis Tower in central Auckland, says its lease with apartment owners will expire on May 31.
Ascott International Management has had the lease of apartments in the hotel "pool" since the award-winning building opened in 1999.
"Ascott sought to renegotiate the lease, which expires on May 31, but unfortunately both parties were not able to come to mutually beneficial terms," said Allison Englebretsen, who is Ascott International general manager for Auckland, Hobart and Sydney. She said the negotiations were held with individual apartment owners.
Ms Englebretsen said the company managed 118 serviced apartments in the Metropolis.
Some owners withdrew from the hotel apartment pool because they were unhappy with returns and were renting them privately or selling. More owners would now have to make decisions about their holdings, said a company that manages a number of apartments in the building as well as acting as sales agents.
City Sales' sales director Mike Richards said Ascott's departure had "implications for those who on June 1 will have vacant apartments and no income from the hotel, so it's important those people get them tenanted".
Mr Richards said there were also possible GST liabilities for owners when the Metropolis apartment they bought under hotel management changed to private rental.
He said some owners approached by Ascott for negotiations in February had looked at their options and about a dozen had sold.
Metropolis was developed by Andrew Krukziener, who is understood to be moving out of the country following a string of business problems. More than 1700 small investors lost money due to poor sales and a string of Krukziener-managed companies have gone into liquidation.
