Work progressing on former post office

Work on transforming the former Dunedin chief post office into a hotel is "still ticking away", the developer behind the project says.

Geoff Thomson, of Distinction Hotels, said his company remained committed to the building it bought in May 2010, for a reported $4.4 million.

"We are now going through the final stages of working out what we are doing, and when we are going to do it."

The Invercargill-based hotelier, whose business includes hotels in Te Anau, Queenstown, Fox Glacier, Wellington, Rotorua, and Whangarei, said the project remained "on track".

The industry had been very tough during the past year, but was showing signs of improvement after "a flat period".

Completing the project would largely depend on what the Dunedin visitor market was doing.

"It's whether we believe it can handle 170 rooms into a market of 500 rooms - that is a large increase.

"We have to make sure we feel comfortable enough that the market will be able to handle it."

In regards to yesterday's announcement of a $100 million, 28-storey luxury hotel, Mr Thomson said Dunedin had "a stunning stadium that needs more rooms but it might be for only 20-30 days a year".

"When looking at an economic balance sheet over a year, it is very hard to justify new rooms. If we both did the rooms at the same time ... there would be more than Dunedin could handle, I believe."

Mr Thomson said work on the project was continuing, including the building being re-roofed, steel beams installed, and the company had taken possession of an airbridge to join a proposed car park at the rear of the Princes St building.

In addition, he had also invested in a local engineering firm to assist with the project.

"We are still ticking away."

Initial plans for the four-star Distinction Dunedin included 180 rooms and suites, restaurants, bars, conference facilities, a business centre, gym, as well as a lap pool.



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