Dorchester Advises Purchase of Emerald Hotel, Gisborne

26 November 2009

Dorchester Pacific advises that its subsidiary Dorchester Finance has completed the purchase of the Emerald Hotel in Gisborne for $12.6m.  

The property comprises 50 hotel units, 3 commercial tenancies, 4 retail tenancies and 6 apartments.  

A first mortgage of $4.5m over the property that was held by New Zealand Guardian Trust was repaid in September. There is no cash impact or additional requirement to provisions as a result of this purchase.  

Executive Director Mr. Paul Byrnes commented; “This purchase is in line with the strategy for our hotel property loan positions of taking ownership and control to optimize value where we believe an orderly realisation over time will produce a significantly better outcome for investors and shareholders. We have seen some value added since our purchase of the Goldridge Hotel in Queenstown and One Riccarton Road (Parkview Hotel) in Christchurch.  

“It is particularly pleasing that with the Emerald we were able to satisfactorily resolve issues around previous ownership and management rights and so avoid putting the complex into receivership. We will therefore be able to fully capitalize on the very good progress that has been made in the last 12 months with completing the hotel complex.  

“As with the Goldridge and One Riccarton Road (Parkview) we will now work closely with the management of the hotel to further improve occupancy and operating performance.”

Dorchester Pacific confirms that it has relied on the NZX Waiver of Listing Rule 9.1.1 issued on 4 February 2009 in completing purchases of the Goldridge Hotel, One Riccarton Road (Parkview Hotel) and Emerald Hotel.  

ENDS