Hotels outside of New Zealand's urban central business districts may start seeking higher prices for sales after the local CP Group bought the 247-room Novotel Ibis Ellerslie hotel for a record $55 million in the face of what Stuff is calling "strong offshore interest." The hotel, which went on the market in June, was previously owned by Host Hotels and Resorts and was expected to command as much as $50 million.
Dean Humphries, Colliers International's national director of hotels, said the sale of the Ellerslie hotel was the largest hotel transaction since the sale of the Hilton Auckland in 2012, representing a yield of 7.76 percent and "just as significantly" bucking the trend of overseas buyers buying major New Zealand hotels.
The last three major hotel sales this year had all been to overseas investors: "There were very strong levels of enquiry for the hotel with more than 70 qualified parties registering their interest," he said.
Humphries said New Zealand hotels were catching the eye of overseas investors because of their high level of return, with RevPAR in many New Zealand tourism centers between 10 and 15 percent per year, higher than Melbourne and Sydney.
Other drivers included New Zealand's tourism boom, with international visitor numbers hitting over three million per year, a 7.8 percent increase on the previous 12 months. Visitor numbers are expected to reach 3.8 million by 2021.
More than $200 million in hotel sales has changed hands in New Zealand so far this year, an increase of 500 percent on the same period last year. They included the Kingsgate Wellington, Chateau on the Park Christchurch and Hotel Grand Chancellor Auckland Airport.