VALUE OF HOTEL CECIL

Southland Times, Issue 25763, 29 August 1945, Page 6

VALUE OF HOTEL CECIL

Evidence Given For Trust Evidence on behalf of the respondent, the Invercargill Licensing Trust, was given at the hearing yesterday of the case in which Walter Thomas William Stroud claimed £38,000 compensation for the Cecil Hotel, formerly known as the Milford, which was taken over by the trust under the Public Works Act. The claimant based his claim on the following valuations:—Land, £12,000; buildings, £20,000; goodwill, loss of investment, loss of interest and disturbance, £6OOO. The valuations of witnesses for the trust varied (in round figures) from £7250 to £BBOO for the land and from £11,250 to £15,000 for the building. His Honour Mr Justice Kennedy presided and with him as assessors were Messrs G. R. W. Barnes and A. W. Jones. Mr J. Robertson, with him Mr B. W. Hewat, appeared for the plaintiff and Mr John Tait appeared for the Invercargill Licensing Trust. The evidence for the trust was concluded yesterday and today counsel will address the court. Albert Samuel Froggatt, president of the Southland Building Society, said he had been a director of the building society for 39 years and had had experience in valuing property in Invercargill and elsewhere for well over 40 years. The witness then read a detailed report on the condition of the property and its value which he made for the trust. He valued the land at £7260 and the building at £11,268, a total of £18,528. To Mr Robertson: He remembered the Supreme Court hotel which stood on the site of: the present building over 60 years ago, but the greater part of the present building was erected about 30 years ago. VALUE AS A BUILDING

Harry G. Fortune, a builder, said he valued the building at £11,676 on the basis' of 1942 costs. Mr Hewat: You valued the building before the alterations were made in 1941 at 7/- to 8/- a foot, or £5942? — Yes.

Do you think that anyone would have sold the building at that price?—-I would not like to have given any more for it. You did not take into consideration the rental value of the building?—No I just valued it as a building. Did you not take into consideration the use that might be made of the building?—l was told to value it as a building. Your figures have no relation to the use that might be made of the building? —No. I valued it solely as a building. What does it cost to build a hotel today?—£2 a foot. You tendered for the North Invercargill hotel. Was your price at £2 a foot?—lt might have been more.

His Honour: You should be able to give us the exact figure?—l did not estimate that job on a footage basis. In reply to further questions from Mr Hewat, the witness said his value of the building before the alterations was based on the assumption that the whole building was 60 years old. If it were assumed that a quarter of the building was 60 years ago and three quarters 32 years old, then his valuation of the building would be £12,199 instead of £5942. TOTAL VALUE OF £24,162

John Thomas Carswell, a merchant and land valuer, said that the main part of the hotel building was erected 60 years ago, but alterations and improvements were carried out about 30 years ago and further alterations and improvements a few years ago. He valued the building at £15,362 and the land at £BBOO, giving a total value for the whole property of £24,162. His valuation was nearly 50 per cent above the Government valuation. His Honour: Are you assuming that the whole of the building is 60 years old?—No, a portion of it. Mr Robertson: We had it in evidence that £l5O a foot was offered for the old Supreme Court site. In view of that do you not think that your valuation of the land on which the Hotel Cecil stands at £lOO a foot is too low?—No, I think I shall stand by my valuation. ANOTHER VALUATION Russell Hosie, land agent, said he valued the whole property at £23,537, £14,825 for the building and £8712 for the land. To Mr Hewat: He had allowed for 60 per cent depreciation because he considered that the best part of the life of the building was over. He considered that the building would be done in 20 years time. To His Honour: He considered ’that Deschlers Hotel was done. If he owned it he would pull it down and rebuild. The Grand Hotel was in a different category. It was a reinforced modern building and should last for 100 years. Mr Hewat: How long does a building stand after it is done?—That depends on the owner. No buildings have fallen down in Invercargill yet. Apparently for a period after buildings are done they are still used?— Yes. By your standard Deschlers should come down now? —Yes. And you expect the Cecil to be in the same condition in 20 years time?— Yes. Adrian B. Turner, builder, said he had had 38 years -experience in the trade and had been building on his own account for 25 years. He valued the building at £ll,BlB, and he considered that the life ahead of the building was 20 to 25 years. Evidence was also given by Allan G. H. Buchanan, Government Valuer, Invercargill.