St Laurence cuts up Hilton ownership

Monday 6 September 2004

Wellington-based property syndicator St Laurence is offering investors an opportunity to acquire an interest in the Hilton Hotel building on Princes Wharf, Auckland, through a $55 million proportionate ownership scheme.

By The Landlord

The property comprises the five-star, 166-room hotel leased to Princes Wharf Hotel. The offer involves offering 1188 proportionate titles or "interests" of $25,000 each to provide $29.7 million with the balance funded by secured borrowings. Investors can buy one or more interests in the scheme. CB Richard Ellis has valued the property at $52.4 million.

St Laurence managing director Kevin Podmore said the projected cash return to investors for the first year is 9.25%. Investors would derive a base rental plus a profit share component based on the hotel's performance. Cash distributions would be made quarterly. The initial term of the investment is six years although investors may sell their interest at anytime.

Princes Wharf Hotel manages the business of the Hilton Hotel and will continue to operate it under a management agreement running for 15 years from June 2001 (when the hotel was built) with a right of extension of five years by mutual agreement.

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