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Proportionate Ownership Investment Of Hilton Hotel

20 October 2004

Proportionate Ownership Investment Of Hilton Hotel Not To Proceed In Current Form

St Laurence today announced that its Hilton Hotel proportionate ownership offer to investors will not be proceeding in its current form.

Kevin Podmore, St Laurence’s Managing Director said; “The level of initial interest expressed in the Offer did not translate into subscriptions and we achieved only half of the $9.7 million required for the contract to purchase the property to become unconditional.

“While we are disappointed that interest in the offer fell short, we remain confident that the hotel represents an excellent investment opportunity with good growth potential. We are now currently exploring an alternative structure which may involve capitalising upon the strong international interest that we received in the investment offer.

“The hotel is New Zealand’s best performing hotel and occupies a prime location providing the finest waterfront views in Auckland, Hilton International is one of the leading hotel operators worldwide, and tourism by all accounts is forecast to experience significant growth.”

The complexity of the proportionate ownership scheme, particularly in relation to the leasehold nature of the property, the variable rental return and the timing of the Offer coinciding with increasing interest rates, were seen as the prime reasons why it did not fulfil expectations.

“Clearly, timing was against us as a similar investment for the Park Hyatt Hotel in Sydney late last year was over-subscribed and closed early. That said, we believe the Hilton Hotel represents a quality investment opportunity and we are discussing with the Kitchener Group the options available to make the most of this opportunity,” Mr Podmore said.

ENDS

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