Hotel sales busiest since pre-2007 crash

Tuesday, 4 April 2017

An architect's impression of a proposed Holiday Inn Express in Queenstown.

Queenstown had the largest number of hotel sales over the past 24 months with nine sold for $173 million.

Dean Humphries, Colliers national director hotels said sales activity was likely to be significantly reduced because investors were holding onto properties to take advantage of strong trading as occupancies rise from the tourist boom.

The peak appears to have been reached some time ago with most of the sales in Humphries' latest report achieved before June 2016.

The sales in Queenstown represented one third of all nationally. Two more hotels there have recently been developed and one has been sold to several investors.

* Quirky QT hotel brand coming to Queenstown**

The tourist town's sales were followed by Wellington with five hotels sold for $133m, and a similar number changed hands in Auckland and Christchurch.

Humphries said hotel development activity was on the rise driven by lack of stock on the market with most new hotels to be built in Auckland, Wellington, Christchurch and Wellington.

A recent hotel announcement was a Quest apartment development in Highbrook Business Park in Auckland.

In Queenstown the QT Hotel chain is setting up in part of a redevelopment of the existing Rydges Hotel. QT is also opening in the former Wellington Museum Art Hotel.

Queenstown recently saw completion of a Ramada with plans for a second at Remarkables Park, and a $60m Holiday Inn Express is due to begin construction pending successful resource consent later this year.

The most recent Auckland hotel development in the pipeline is Viaduct Harbour Holdings' announcement it was seeking a developer for for a luxury hotel on the One Market Square overlooking the waterfront, while the Christchurch Casino recently announced plans for a hotel.

New Zealand-based investors have accounted for about $200 million or 39 per cent of hotel deals cited by Humphries, followed by buyers from Hong Kong (30 per cent) and Singapore (18 per cent).

A majority of large hotel deals were brokered by Colliers but numerous other smaller accommodation outlets were marketed by specialist tourism and business agents.

Strongest yields on sale were achieved in Auckland and Queenstown, where hotels are also experiencing strongest room yields from operations.

The single biggest hotel deal in the Humphries report was the 273-room Novotel Lakeside Queenstown sold more than 12 months ago for $91m.