Record hotel sale hallmark of $290m year

Record hotel sale hallmark of $290m year

A major Queenstown hotel has sold for a record price of more than $90 million.

November 20, 2015 –

The sale of an iconic Queenstown hotel constitutes the largest single hotel transaction in New Zealand in nearly a decade.

The 273-room Novotel Queenstown Lakeside sold this week for more than $90 million, says Colliers International’s National Director of Hotels, Dean Humphries, who acted as a co-adviser in the transaction.

“This is a record price and the sale reflects the largest single hotel transaction completed in New Zealand since 2006.”

The hotel – purchased by an established New Zealand hotel investor – was one of seven owned by US Company REIT Host Hospitality, Humphries says.

“REIT Host Hospitality are looking to divest all their hotels in the Asia Pacific region and move capital back to the United States to take advantage of improving conditions there.”

New Zealand’s hotel market remains strong, Humphries says.

“This sale marks a significant year for hotel transactions which have resulted in just over $290 million of hotels changing hands so far in 2015 - just shy of the previous peak in 2010, which saw nearly $300 million of transaction activity.”

The landmark sale follows the sale of Novotel Ibis Ellerslie Auckland by Colliers’ Hotels division for more than $55m – a record price for a non-CBD hotel asset in New Zealand, Humphries says.

“Colliers is also currently marketing for sale the 200-room Ibis Wellington and 139-room Novotel Wellington, which are attracting strong interest.

“Both domestic and offshore investors are flocking to New Zealand to take advantage of the current tourism boom with international visitor arrivals, recorded at 3.04 million for the year ending September 2015, up 8.6% compared to the same time last year.”

Humphries says hotel occupancy levels and room rates are reaching record heights right across the country.

“The current positive market conditions are culminating in greater profitability and rising property values for hotel assets.”

The softer New Zealand dollar and the country’s reputation as a safe travelling destination, particularly on the back of recent events in Paris, are also expected to further contribute towards the country’s international appeal, Humphries says.

“The Ministry of Business, Innovation and Employment forecasts visitor arrivals to reach 3.8 million per annum by 2021.”

ENDS

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