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High rise hits Auckland Hyatt apartment owners
19.04.06
By Anne Gibson
Owners of apartments in Auckland's $74 million Hyatt Residences are facing a 99 per cent body corporate fee rise this year as they are hit by climbing costs and the end of guaranteed rent returns.
The owners of the 111 apartments in the 17-level tower paid body corporate fees of $723,616 last year but this could rise to $1.4 million, the figure budgeted for this year.
Higher charges for water, common area electricity, wastewater, gas and closed-circuit security monitoring have pushed up owner levies to the point where some fear they might get a bill instead of a rental payment.
Coupled with that is the end of an 8.5 per cent minimum guaranteed rental return period which expired in February.
The Hyatt Residences units were widely marketed in Singapore and Tahiti and buyers got the attractive three-year guaranteed return from units which were leased back to the neighbouring Hyatt Regency hotel.
Theo Johannink who owns and occupies a unit on level 14, said he was unhappy with the price rises for the Princes St block.
"It's astronomical," said Johannink, who is a body corporate member and plans to complain at the next meeting. "It's a beautiful apartment but the body corporate fees are too high."
He paid $13,500 in body corporate fees for the last financial quarter and expects to pay $36,000 for the year.
He lives in one northern-facing apartment which was formerly two units.
When he lived in a penthouse unit on level 17 of the building, he paid around $5000 in annual fees.
Part of the much higher new fees would go to a one-off cost to cover the installation of water meters throughout the building, he said.
But another resident, Don Hope, who runs his publishing business from the building, said he did not care about any fee increase because it was such a great place to live.
Resident Jody Foster said she expected this year's annual charge would be under $1.4 million but the exact amount would not be known until the end of June.
The hotel had subsidised owners' body corporate payments last year due to under-budgeting so owners were now faced with a catchup this year as well as a fee rise, she said.
Minutes from a Hyatt Residences' body corporate meeting showed owners could expect rental returns of 6 per cent to 7 per cent rather than the 8.5 per cent guaranteed rent.
Damian Piggin of Ray White City Apartments said the combination of factors would mean the units could sell for less than their original asking price.
Owners selling Hyatt Residences units needed to be realistic about what they could expect if they put their properties on the market now, he said, particularly because of the body corporate cost rises and without the backup provided by the guaranteed rental return.
"We've sold six units there in the last 12 months and I have four for sale there now," Piggin said, citing prices for one-bedroom units of $300,000-plus without a carpark and two-bedrooms of around $475,000.
"From what owners have told me, that's a 20 per cent drop on what they paid originally," Piggin said.
He has sold a one-bedroom unit on level five for $310,000. The unit was generating $30,000 annually from the hotel lease, amounting to about $570 a week under that system, Piggin said.
The owner now planned to cancel the lease with the hotel and rent it privately for more than $500 a week, the agent said.
HYATT RESIDENCES
* Apartment block at 2-10 Princes St.
* 17-level tower built in 2000.
* Initially developed by Jihong Lu's Savoy Equities.
* Sold to Australia's Hudson Pacific Group in 2000
19.04.06
By Anne Gibson
Owners of apartments in Auckland's $74 million Hyatt Residences are facing a 99 per cent body corporate fee rise this year as they are hit by climbing costs and the end of guaranteed rent returns.
The owners of the 111 apartments in the 17-level tower paid body corporate fees of $723,616 last year but this could rise to $1.4 million, the figure budgeted for this year.
Higher charges for water, common area electricity, wastewater, gas and closed-circuit security monitoring have pushed up owner levies to the point where some fear they might get a bill instead of a rental payment.
Coupled with that is the end of an 8.5 per cent minimum guaranteed rental return period which expired in February.
The Hyatt Residences units were widely marketed in Singapore and Tahiti and buyers got the attractive three-year guaranteed return from units which were leased back to the neighbouring Hyatt Regency hotel.
Theo Johannink who owns and occupies a unit on level 14, said he was unhappy with the price rises for the Princes St block.
"It's astronomical," said Johannink, who is a body corporate member and plans to complain at the next meeting. "It's a beautiful apartment but the body corporate fees are too high."
He paid $13,500 in body corporate fees for the last financial quarter and expects to pay $36,000 for the year.
He lives in one northern-facing apartment which was formerly two units.
When he lived in a penthouse unit on level 17 of the building, he paid around $5000 in annual fees.
Part of the much higher new fees would go to a one-off cost to cover the installation of water meters throughout the building, he said.
But another resident, Don Hope, who runs his publishing business from the building, said he did not care about any fee increase because it was such a great place to live.
Resident Jody Foster said she expected this year's annual charge would be under $1.4 million but the exact amount would not be known until the end of June.
The hotel had subsidised owners' body corporate payments last year due to under-budgeting so owners were now faced with a catchup this year as well as a fee rise, she said.
Minutes from a Hyatt Residences' body corporate meeting showed owners could expect rental returns of 6 per cent to 7 per cent rather than the 8.5 per cent guaranteed rent.
Damian Piggin of Ray White City Apartments said the combination of factors would mean the units could sell for less than their original asking price.
Owners selling Hyatt Residences units needed to be realistic about what they could expect if they put their properties on the market now, he said, particularly because of the body corporate cost rises and without the backup provided by the guaranteed rental return.
"We've sold six units there in the last 12 months and I have four for sale there now," Piggin said, citing prices for one-bedroom units of $300,000-plus without a carpark and two-bedrooms of around $475,000.
"From what owners have told me, that's a 20 per cent drop on what they paid originally," Piggin said.
He has sold a one-bedroom unit on level five for $310,000. The unit was generating $30,000 annually from the hotel lease, amounting to about $570 a week under that system, Piggin said.
The owner now planned to cancel the lease with the hotel and rent it privately for more than $500 a week, the agent said.
HYATT RESIDENCES
* Apartment block at 2-10 Princes St.
* 17-level tower built in 2000.
* Initially developed by Jihong Lu's Savoy Equities.
* Sold to Australia's Hudson Pacific Group in 2000
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