Metropolis investors target manager

By Campbell McIlroy

Friday 9th November 2001

Investors in Auckland's controversy-plagued Metropolis development yesterday said they may seek to sack the hotel manager as they face reduced returns and plummeting valuations.

Timaru-based lawyer David Wood said he represented four clients with about $3 million invested in units let to the hotel.

Mr Wood said he had contacted the body corporate secretary for the details of all the investors and would seek to call a meeting to discuss the role of hotel manager Ascott.

Investors placed their units in the hotel pool on the promise of 9.5% return which was guaranteed for two years.

The guarantee period runs out in December and the hotel management wrote to investors two weeks ago warning returns would be 2.5-4% for the year 2002.

Mr Wood said he did not think Ascott was aware investors could have the company removed as manager of the hotel once the guarantee period expired.

He said the letter sent out by management was irresponsible and could adversely affect investors' ability to refinance their units.

Resales of some units have seen losses of up to a third of the original GST-inclusive price paid.

"No one I've been associate with has been impressed by the business expertise of the management."

But Ascott Metropolis general manager Frank Delli Cicchi said criticism came as a surprise.

"I haven't been approached by anyone regarding the management of the hotel. The operation has improved this year and will again next year."

He said some investors had called after the letters were sent out but he said they weren't surprised by the predictions given the state of the Auckland hotel market and global tourism industry.

Since September 11 the hotel has had 300-400-room nights cancelled up to the end of December.

But Mr Delli Cicchi said over the past three months the hotel's average occupancy level had been running in the high 70% region, compared with just 60% for the first year of operation.

"Our occupancy levels are at a par with our competitors or better."

Mr Delli Cicchi said he was happy discuss any concerns investors may have about the management of the hotel.

If they did seek to remove Ascott as manager he said the company would have to look at it and respond accordingly.

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