Queenstown hotel sales soar

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Big price: Novotel Queenstown Lakeside

The country has experienced its busiest period of hotel sales in a decade, with Queenstown reporting both the largest sales volume and the biggest individual sale.

A hotel sales survey by Colliers International found than $500 million of hotel inventory changed hands in 2015/16 – the strongest period on record since 2005/06.

Queenstown accounted for just over 30 per cent of the total sales volume, with nine sales over the 24-month period totalling $173m; and also notched up the largest single hotel transaction of the last decade – the 273-room Novotel Lakeside Queenstown purchased for $91m.

Wellington was second in total sales volume with five transactions worth $133m accounting for 26 per cent of the total. Auckland came in third with $94m of sales followed by Christchurch with $78m.

Almost two thirds – 65 per cent – of hotel transactions were completed via public marketing campaigns, with Colliers brokering over 90 per cent of those deals.

New Zealand-based investors bought about $200m of hotel assets in 2015/16, accounting for just under 40 per cent of transactions by value. The biggest source of foreign capital was Hong Kong, accounting for 30 per cent of the total sales by value, followed by Singapore, with 18 per cent of total sales.

Dean Humphries, national director hotels for Colliers, says the strong figures reflect high levels of confidence in the nation’s hotel sector.

“A record 3.5 million visitors came to New Zealand last year and the government is forecasting 4.5 million annual visitors by 2022. That growth has driven record trading numbers in gateway cities like Auckland and tourist hot spots like Queenstown. As a result, investors are benefiting from strengthening investment yields.”

Humphries says yields have compressed in the order of 100 to 200 basis points across the five main tourism markets, with the strongest yields being achieved in Auckland and Queenstown.

NZ Herald