NZ Super Fund’s investment in a $300 million hotel venture represents the single largest off market hotel transaction in New Zealand’s history, says the Colliers International specialist hotel advisor who played a strategic role in the introduction and ongoing negotiations.
New Zealand’s $42 billion sovereign wealth fund this week announced it was investing in a portfolio of hotels established by one of the country’s largest hotel owners, the Russell Group and Lockwood Property Group.
The venture will create a platform for NZ Super Fund to invest further in New Zealand’s tourism sector.
The phased investment includes the Four Points by Sheraton and Adina Auckland Britomart in Auckland, the BreakFree Hotel in Christchurch, and an intention to acquire and develop additional sites.
Dean Humphries, national director of hotels for Colliers International, played an instrumental role in this strategic off market joint venture with the entities.
"This has been a 12-month journey resulting in New Zealand’s largest ever off market hotel transaction, with the result of all three hotels remaining in New Zealand ownership," he says.
"Quality New Zealand hotels assets are rarely traded, and many are owned by offshore interests.
"When the Russell and Lockwood Groups were considering a divestment strategy, the possibly of retaining these assets in New Zealand hands was an appealing objective for the two Kiwi entities.
"Whilst there would have been significant interest in this portfolio if it had been offered on the open market, a decision was made by the owners to pursue an off-market strategic alliance with a New Zealand-based entity that would ensure these assets and the future profits they generate stay onshore," says Dean.
"This is a great outcome for all New Zealanders who can now collectively share in the future profits generated by these hotels, which form part of the country’s largest export industry."
Dean says tourism is undoubtedly one of the economic pillars and future growth arms of New Zealand.
Latest Statistics NZ figures show tourism directly employs one in seven New Zealanders and contributes to $15.9 billion of GDP, or 6.1 per cent.
Total annual tourism expenditure for the year ending March 2018 was $39.1 billion, an increase of 7.7 per cent ($2.8 billion) from the previous year.
The arrangement between NZ Super Fund and the Russell and Lockwood Groups involves two joint ventures.
One will own the hotel properties, while the other will manage properties and identify future opportunities.
The Four Points by Sheraton is a recently completed, 4.5-star hotel with 255 rooms, located in a repurposed office building on Auckland’s Queen Street. The Adina has 160 rooms while the BreakFree has 263 rooms.
