Two major hotel firms have bought into central Christchurch, in a multimillion-dollar sign of confidence in the Cathedral Square area.
One will repair, rebrand and reopen the boarded-up 179-room former Millennium building in the square. The other will build a new 140-room hotel on a vacant piece of the old Press site nearby on Gloucester St.
Both the existing and planned hotels are 14-storeys high.
The news follows last week’s announcement of a new 200-room Novotel hotel for Christchurch Airport, and concern at the effect of that plan and anchor project delays on hotel development around Cathedral Square. It also follows news of REV3 Developments’ plan to build the Cathedral Towers apartments next to the Millennium site.
The latest buyers are both New Zealand-owned businesses looking to expand nationwide hotel chains to Christchurch.
Southland businessman Geoff Thomson who owns Distinction Hotels, is paying $8.6 million for the former Millennium building.
Engineers and architects are assessing the building. Thomson said they hoped to start repairs in September, when the sale is due for settlement. It is likely to be renamed Distinction Christchurch.
“This is a building worth saving, and a great location. It will help us grow our brand and we need rooms in Christchurch,” he said.
Brian Mansfield, spokesman for the building’s seller Jegual Investments Ltd of Singapore, said after lengthy insurance negotiations the building had been in limbo. Thomson had approached them “with a number we couldn’t say no to”, Mansfield said.
Millennium and Copthorne Hotels New Zealand previously ran a five-star hotel from the building, but have relinquished their lease with no plans to return. The property has a $31.75m rating valuation.
The other hotel chain buying into the area is Auckland-based Sarin Group, which has paid $1.5m for 160 Gloucester St between Press House and Cathedral Junction.
They plan to spend $25m to $30m building a four-star hotel on the vacant land, the old Press print house site.
Sarin Group is co-owned by its chief executive Anuradha Sarin and her husband, Raman Sarin, who have nationwide hotel and events centre interests. Raman Sarin also heads VR Hotel Group, which has more than 1000 hotel rooms in New Zealand, the United States and India.
Raman Sarin said they would build the hotel designed and consented for the site in 2008 for previous owner Ganellen, with only “small adjustments here and there” . The design was part of a three-building plan of which only Press House was built.
Sarin Group is negotiating with a large international company to brand and operate the new hotel. The operator is already in Christchurch, but its identity remains confidential.
The hotel will take under two years to build. Sarin said they were waiting for certainty about the delayed Christchurch Convention Centre to start.
The hotel would not have serviced apartments. Bar and dining facilities and parking would be included, and a vehicle entrance shared with Press House next door.
“It will be a very smart building, with a lot of glass,” Sarin said. “We are very excited about the project, and it will be good for the city as well. It will be one of the newest branded hotels in New Zealand.”
Brian Thomson said his hotel would benefit the Christchurch.
“This will bring more people into the CBD. It will be good for the city and tourism and create vibrancy and foot traffic.”
He said he was not deterred by delays on public projects.
The area already has the makings of a busy hotel precinct.
Developers Canterbury Property Investments are building a Quest Hotel on Gloucester St on the other side of Press House, and want to build another behind it facing Cathedral Square. Novotel and Rendezvous hotels are already on the block, and the Crowne Plaza will reopen in the old Forsyth Barr tower in the next block during 2017.