111 upmarket units with 8.5% return guarantee
Bayleys launches the Hyatt Residences apartment project in Singapore on Friday ahead of the project’s weekend launch in Auckland.
At a time when the serviced apartment market is under pressure, and managers of at least five buildings in New Zealand and Queensland have been unable to maintain rental guarantees, the developers of the Hyatt Residences are promoting it with an 8.5% net return guaranteed for the first three years, with a forecast of better returns after that.
The confidence comes largely from the relationship with the Hyatt. The 17-storey block of 111 apartments (at right in picture of model) will be built by a Hudson Savoy joint venture, adjoining the Hyatt Regency Hotel with frontage on Princes St. The hotel will gain extra facilities, including a health club, pool and new ballroom facilities, and Hyatt will operate rooms in the serviced pool.
It is Hyatt’s first venture into managing strata titles anywhere. The big question will be how much of the business market will be attracted to a hotel complex which previously had been unable to offer the class of accommodation the Hyatt brand is known for internationally.
The Hyatt brand is expected to be an attraction for Singaporean buyers — the Bayleys promotion there by Dinah Macky and Sue Stanaway will be at the Grand Hyatt on Scotts Rd — and the chain’s international marketing expertise is proving valuable, providing 30% of bookings.
Jihong Lu’s private Savoy interests and Australian-listed Hudson Investment Group settled the $40 million purchase of the Auckland Hyatt Regency and adjoining land last August, then sold 47.5% to New Zealand-listed Savoy Equities.
The Hyatt has 273 rooms, recently refurbished for $10 million. The transaction priced them at about $120,000 each. The apartment block and extra facilities will be built on the 5200mÂ² of adjoining development land, valued at about $7 million, or $1350/mÂ², which in city terms is cheap.
That has helped make the Hyatt Residences very competitively priced. Among recent apartment and serviced-apartment developments, the Metropolis is clear price leader at around $6350/mÂ² overall average price, net of furniture and parking.
In the next pack, The Hyatt on $4575/mÂ² ranks behind two Hobson St competitors, the Heritage Grand on about $5060 and the Heritage Auckland around $4845. The troubled Parklands Apartments on Greys Ave ranked with the Heritage Grand, while the Park Central up Queen St, run by Quest NZ (in which Gary McNabb of Allfields recently took a 50% interest) ranked with the Heritage Auckland.
The Hyatt Residences will rank well below all of those, and CityLife, for studios at an average $4300/mÂ², although it will have only 13 of them.
In the big market, for one-bedroom units, the Hyatt units are priced around $4200/mÂ², the average, slightly above CityLife but behind the other five above. In that category, Phoenix Gardens units were priced around $3230/mÂ². For two bedrooms, the Hyatt has been priced just below average at $3875/mÂ², level-pegging with Tower Hill, far behind the Heritages and CityLife (ranging from $4400/mÂ² to $4840/mÂ²) and Metropolis at $6460/mÂ².
Starting prices (ex gst and furniture packages) are $160,000 for the third-floor 37mÂ² studio to $400,000 for the larger of the two-bedroom units on that floor, containing 103mÂ². Four of the two-storey penthouse units on the 16th and 17th levels have been taken, leaving a 147mÂ² three-bedroom unit as the top of the available range at $860,000.