We were engaged by the client to investigate ways to realise value from a portfolio of leasehold residential apartments in the QuBA complex Auckland. These were “inherited” by the client as a commercial legacy from a property developer bankruptcy. At the time we became involved, the apartments were effectively unsaleable due to the underlying leasehold land structure and total OPEX costs.
The task was to analyse the potential for value improvement by amalgamating the client’s existing portfolio with another 90 leasehold residential and commercial apartments within the QuBA complex controlled by statutory managers—and reconfigure these into approximately 140 hotel apartments. As part of the value enhancement exercise, a strategy was also devised to split-out up to 100 surplus basement carparks in QuBA not required for hotel operation and attach these to an adjoining A-grade commercial office building owned by the client. This was a complex exercise given the underlying leasehold land and improvements tenure (three separate lease layers), QuBA precinct society voting complexities and Council planning requirements—but resulted in many millions of dollars of value being unlocked.
QuBA was successfully converted by the client to an apartment hotel operating under the Adina brand—and transformed from a financially unsustainable leasehold residential apartment complex into a financially viable leasehold tourism property investment.
Coordinating feasibility and initial design development for hotel conversion.
Financial modelling of various hotel key and operational scenarios and investment dimensions/risks.
Identifying related planning and underlying legal tenure issues.
Briefing/coordinating legal advice relating to complex building management and tenure issues.
Preparation of an information memorandum for the purposes of identifying potential hotel operators/investors.
Reporting to the stakeholders.
Russell Property Group