New Zealand's Pandey family buys Novotel Wellington

In Wellington, New Zealand, the Pandey family has purchased the 139-room Novotel Wellington for an undisclosed price that is reportedly a record for the city. The sale is the first major hotel deal in the country this year, and according to Dean Humphries, Colliers International’s national director of hotels (the sole advisor for the transaction), the price reflects a record yield of around 7.6 percent.  

“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 told Scoop. 

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Humphries also noted that hotel occupancy levels and room rates are reaching new heights throughout New Zealand, and the current positive market conditions are resulting 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.”

Humphries also noted that investment returns remain "very attractive on a global basis," generally between 7 percent to 8 percent for well-located and maintained assets New Zealand’s key markets, and Colliers expects 2016 to be a strong year for the country's hotel industry. “We are aware of a number of deals currently being finalised and therefore anticipate further announcements over the next few months.”

The Novotel Wellington 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.