By ANNE GIBSON property editor
The Hyatt Hotel in Auckland and surrounding development land have been sold by the company controlled by bankrupt investor Jihong Lu to Australia's Hudson Group.
The sale by Savoy Equities includes Hudson's taking control of the Hyatt Residences, the 111apartment complex, projected to be worth $58 million when finished.
Savoy and Hudson bought the Hyatt and nearby buildings for about $40 million last year. For that, they got the Hyatt Regency Hotel with 273 rooms, more than 5000 sq m of development land, the existing four-storey Princes Court and the nine-unit Eden Hall, with its historic classification.
But the latest share transaction appears to give Hudson the Savoy stake for just $2.4 million.
"The transfer of Savoy Equities' 47.5 per cent shareholding in the joint venture to Hudson Pacific Group was by way of 9,831,000 fully paid ordinary shares, which are currently trading on the Australian Stock Exchange at approximately 25c per share," said John Dalzell, of Hudson.
The price difference between the two deals was due to the expensive nature of the new development and the amount of expenditure required to launch it, he said.
The existing hotel required major work, including the refurbishment of the bar and lobby. At least $1 million needed to be spent on the hotel in the next 12 months.
Listed Australian company Hudson Pacific Group will buy Savoy's 47.5 per cent in the joint venture Hudson-Savoy Holdings.
Savoy Equities is 58 per cent owned by Mr Lu, adjudged bankrupt last week in the High Court at Auckland. Malaysian engineering firm MESB succeeded in its court action against Mr Lu, suing over a $2.5 million debt relating to a failed share deal.
The share sale by Savoy had Overseas Investment Commission approval, said Mr Dalzell, who refused to give an indication of the price paid.
He said the transaction was already in place before the court proceedings against Mr Lu.
The apartments range from $178,000 to $860,000. Prices have already risen 5 per cent since initial sales last year, according to Mr Dalzell. He predicted that when 70 per cent of the apartments were sold, prices would go up a further 10 per cent. Sixty-six per cent of the apartments have been sold.
Tenders are being prepared for the 17-level apartment development on Princes St beside the Hyatt Regency Hotel. A shortlist of building companies will get the tender documents in late January.
Hyatt stake goes for $2.4m song
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