$120m hotel set to supercharge city CBD

Thursday, 7 March 2024

A four-star hotel, residential and retail development worth up to $120m has been announced for Hamilton. Mayor Paula Southgate and economic development committee chairperson Ewan Wilson react near the Victoria St site.

The developers behind parts of Auckland's Viaduct have spotted Hamilton's potential and they're putting their money where their mouth is with a $120 million hotel, retail and residential development downtown.

The resulting 10 storey-plus high end hotel development is set to supercharge Hamilton’s CBD and link hotspots including the new Waikato Regional Theatre and Victoria on the River.

Due to incorporate apartments and retail space, the four star hotel development is earmarked for Victoria St, just north of the under-construction theatre.

The project will add further buzz to the inner city which, besides the theatre, has seen a range of big redevelopments in recent years.

In red in this council-supplied graphic is the area earmarked for the hotel development, the yellow area is for open public space.

As foreshadowed exclusively last year by the Waikato Times, the minimum 10-storey new hotel project is due to be undertaken by major Auckland-headquartered developer Templeton Group.

The cost is estimated at up to $120 million across 2000m² of land.

It’s a first time Waikato project for Templeton, which has had its eye on the burgeoning city.

Founder Nigel McKenna says Hamilton is too good an opportunity to miss given its surging growth.

Stoked as - mayor Paula Southgate and economic development committee chairperson Ewan Wilson are singing the praises of a new deal to build a four-star hotel on Victoria St sites currently owned by the city council.

“To me, Hamilton is not only the fastest growing, it will continue to be so,” said McKenna, whose firm has been a leading hotel developer nationally, including in Auckland and Wellington.

City political leaders are stoked about the conditional deal between the council and Templeton, due to pave the way for the development within the next few years.

“This is going to be a fabulous 4-star hotel right in the heart of our city,” said mayor Paula Southgate, who has long pushed for such a development.

“So it’s win, win, win as far as I’m concerned - hotel, accommodation and economic development.”

Templeton Group founder Nigel McKenna says fast-growing Hamilton presents a great opportunity for the company to create a major new hotel development.

Southgate said Hamilton was great at hosting major events and a new hotel would help it attract more. The site would also help boost the number of inner city residents and CBD foot traffic.

Economic development committee chairperson Ewan Wilson said of the development: “It’s transformational. It’s yet another cornerstone in the rejuvenation of the city’s CBD.”

The deal involves the council and Templeton signing a conditional agreement for the latter to buy properties at 242-254 Victoria St to the north of the regional theatre.

The red Mexico restaurant building in the centre marks the northern end of the properties from 242-256 Victoria St that are due to be the site of the new hotel development.

Templeton has a year to complete undisclosed matters required by the council to make the deal unconditional. Building is expected to take several years after that.

Southgate said making the deal unconditional would involve “due diligence on both sides”.

“It’s just finalising [things] always takes time with these large commercial deals.”

Wilson said the council had fall back options in the “unlikely” event of the arrangement with Templeton not panning out.

Besides a hotel with yet to be finalised bed numbers, it’s hoped the site will include a “world-class” food and entertainment precinct on the ground level opening to the river front, with office space, and residential apartments above.

An aerial shot of Victoria on the River taken from the east - buildings to the centre left of the site will be included in the two redevelopments planned.

The council purchased 242-266 Victoria St at a cost just under $6.5 million in 2018.

Wilson said the sale of part of this purchase to Templeton will generate a significant undisclosed profit.

The council will hang on to 260-266 Victoria St for developing into a public space and extending the Victoria on the River development, with Templeton’s help. Planning and costs of this were yet to be finalised.

“This development will continue the work already done through previous projects in the nearby [Victoria on the River] and the exceptional work of Stark Property,” said Southgate.

Besides Hamilton’s growth, McKenna said Templeton was attracted to the city because it was “smack bang in the middle of a very large area”.

Templeton’s recently opened Abstract Hotel in Auckland - the firm has a strong development track record nationally.

“So to me it’s just too big an investment opportunity to not be involved in.”

Auckland and Tauranga, he said, served smaller geographical areas.

He, too, was confident the deal would go unconditional. While there were always risks of events like Covid-19 coming along, he felt if “semi-normality” prevailed the project would proceed, although there was still a lot of planning to do.

McKenna said Templeton would look to run the new hotel itself, lease out retail space and sell the apartments.

Besides a strong historical track record, Templeton has a range of multi-billion-dollar developments underway across New Zealand.

“Opening up this site to the mighty Waikato River will give Hamiltonians and visitors the opportunity to enjoy stunning views with an outstanding food and beverage precinct and hotel,” McKenna said.

The council said it and Templeton were working closely with current tenants located at the affected properties.

A number have previously expressed concerns at not being able to carry on leasing their business spaces once development goes ahead.