CBD Serviced Apartment Project Starts

CBD Serviced Apartment Project Starts

Construction has begun on the twin tower Celestion Apartments in Anzac Avenue. It’s one of only two new apartment developments currently going up in Auckland’s CBD. Being built by Kalmar Construction (responsible for The Stadium Apartments and Waldorf St Martins), the Celestion Apartments will have a completed sales value of around $60 million.

Celestion’s backers, Tasman Cook, have secured funds through the ANZ bank that enable them to take advantage of outstanding market opportunities. Managing director, Leonard Ross says it’s clear, now’s a great time to step back into the serviced apartment development arena.

“With the drop off in the number of apartments being built and a steep decline in building consents slowing future growth, there’s a huge shortage of accommodation in the CBD. Yet, because of the global meltdown, New Zealand is enjoying a strong immigration wave, which looks set to continue and grow.”

He says investing in the apartment market has recently become more attractive with interest rate falls and a market realignment in rentals helping to achieve strong yields.

With the collapse of many finance companies, it’s likely there won’t be any second tier funding available for large apartment projects such as these for at least five years. And the banks’ strict lending criteria makes it difficult for developers to proceed. As a result, says Leonard Ross, “the city apartment shortage will continue to get worse.”

Tasman Cook intends to capitalise on the growing trend for corporate travellers to stay in serviced apartments rather than five star city hotels. In a cost-conscious environment, they provide better value for money with much more living space. Occupancy rates show serviced apartments in New Zealand’s cities are generally full whereas many luxury hotels have high vacancy rates.

The Celestion Apartments are due for completion in 2010 and Tasman Cook has secured successful Australasian hotel operator Waldorf to manage the serviced apartments. The Waldorf Group has a huge number of projects in its portfolio and is well-known for the high quality service it provides. The Waldorf focuses on durability, offering tried and true solutions for a low-maintenance product with low overheads to give investors better value for money and a secure investment.

ENDS

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