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Savoy sells out of Hyatt and owner looks abroad

By Campbell McIlroy

Friday 17th November 2000

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ALMOST READY TO GO: An artist's impression of Hyatt Residences, which is to be built in Princes St, Auckland
The new development company taking over Auckland's Hyatt Residences from Savoy Equities may not bother to market the project in New Zealand.

The company, Hudson Pacific Group, said only 10% to 20% of the development, by value, has been sold locally but sales were close to its self-imposed 70% threshold before construction could start.

The most interest has come from Singapore, followed by French Polynesia with large sales in New Caledonia and Tahiti, next came Australia, with equal levels of interest in Hong Kong and the UK, and a few sales in the US.

Bottom of the heap was the level of interest shown by the local market.

A sales team left for Dubai on Wednesday.

Hudson chief executive John Dalzell said everybody knew the local residential and apartment markets had been very difficult to work in over the past six to nine months.

But it was very positive for the development, in Princes St, to be able to get off the ground in spite of that market, he said.

There was a strong possibility the company may not even market the development in New Zealand again.

"When you look at the dollars spent compared to the return out of each market it is hard to justify the expenditure in New Zealand."

Mr Dalzell said he believed there were a number of local investors waiting to see where the project was going, but they now ran the risk of missing the boat.

Hudson has set a 70% pre-sale mark by value before construction can begin on the development.

Latest figures showed 66% of the $58 million development had been sold, with one bulk contract under negotiation in Singapore which could push the project over threshold within the next couple of weeks, Mr Dalzell said.

Mr Dalzell said realistically it would be the beginning of December before the threshold was met.

But when it is met, the existing discounted prices for the units will be put up 10%.

This week Jihong Lu's Savoy Equities sold its 47.5% interest in the Hyatt Residences just as tender documents for construction on the development were being prepared.

Savoy's interest has been sold to joint-venture partner Australian listed company Hudson Pacific Group.

Savoy has given up on its foray into property, highlighted by the disastrous Britomart debacle, in favour of pursuing its technology interests.

Hudson-Savoy Holdings, the joint-venture company set up to undertake the Hyatt development, will be renamed Hudson New Zealand.

Hudson Investment Group also has a 47.5% holding, with the remaining 5% share held by a Hudson nominee company HTH Nominees.

Tender documents for the construction of the development are being prepared and will be offered to a short list of four or five construction companies in the third week of January.

Construction is due to begin some time between January and April next year and to be completed before the next America's Cup in September 2002.

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