The sale of the 139 room Novotel Wellington marks the first major hotel transaction completed this year.
Dean Humphries, Colliers International’s national director of hotels, the sole advisor for the transaction, said the undisclosed sale price, reflecting a yield around 7.6 per cent, represented both a record yield and price.
“This sale price was the highest yet for a four star hotel in the capital, and was an asset acquired by New Zealand’s Pandey Family subject to on-going management by Accor Hotels.”
Humphries said with hotel occupancy levels and room rates reaching new heights right across the country, the current positive market conditions are culminating in greater profitability and rising property values for hotel assets.
“As a result, we have seen a marked increase in investors seeking hotel opportunities and an increasing number of hotel owners looking to test their assets’ values on the open market. The combination of New Zealand’s current tourism boom, international visitor arrivals being at record levels, our weakening currency and low interest rates are attracting an increasing number of hotel investors to our market.”
Investment returns remain very attractive on a global basis, generally between 7 per cent to 8 per cent for well-located and maintained assets in our key markets, said Humphries.
“We anticipate another strong year ahead for the New Zealand hotel market, underpinned by favourable market conditions and last year’s momentum. We are aware of a number of deals currently being finalised and therefore anticipate further announcements over the next few months.”
The recently refurbished Novotel Wellington, a four star-plus Qualmark rated hotel on The Terrace, was one of seven owned by US hospitality giant Host Hotels & Resorts, who are in the process of divesting all their hotel assets in the Asia Pacific region.
This sale follows two others completed late last year, the Novotel Ibis Auckland Ellerslie and the Novotel Queenstown Lakeside.