Auckland sees biggest hotel sale in 12 years

Waldorf Stadium Apartment Hotel. Photo credit: Colliers International (Waldorf Stadium Apartment Hotel)

The Waldorf Stadium Apartment Hotel in Auckland, New Zealand's Central Business District, has been sold to the Australia-based Mulpha Group for more than $54 million. The 178-unit strata-title development was sold subject to a new 11-year performance lease underpinned by Japanese serviced apartment conglomerate Daiwa House Group, which has a market capitalization of US$19.15 billion as of December 2017.

Colliers International and CBRE announced the sale following an international campaign that saw multiple investors looking to take advantage of New Zealand’s current tourism boom and strong hotel-market fundamentals.

Mulpha Group acquired Australia and New Zealand's Waldorf serviced apartment business in 2017 with further plans to expand in the region. CEO Greg Shaw said the strong underlying fundamentals driving the New Zealand tourism and hotel sectors were some of the main reasons the company was investing in the sector. "In terms of the Waldorf Stadium Hotel, we were attracted to its position in a key gateway city, strategic location in the heart of the Auckland CBD, together with several strategic opportunities to add additional value to this asset over the short-to-medium term working in conjunction with the hotel operator Daiwa House Group.”

Dean Humphries, national director of hotels at Colliers International, said the transaction is the first major hotel sale in the Auckland CBD since the Hilton Auckland sold in 2012. “It is also the largest hotel transaction in Auckland in 12 years since the Carlton on Mayoral Drive sold for NZ$113 million in late 2006.”

Wayne Bunz, national director of CBRE Hotels, said the hotel is a great addition for Mulpha to add to its significant hospitality asset portfolio in Australia, which includes Hayman Island, Bimbadgen Estate, and InterContinental Hotels in Sydney and Sanctuary Cove. “Hotels rarely trade in Auckland and are predominantly held by long-term investors,” Bunz said. “This is the largest transaction in New Zealand since CBRE and Colliers International sold the Novotel Queenstown in 2015 at NZ$91.3 million. The majority of interest came from offshore investors attracted by New Zealand’s transparent property market, exceptionally strong trading conditions and the attractive yield profile of this asset.”