Asian investors look to NZ after Australian hotel buy-up
BUSINESSDESK: Asian investors are looking to the New Zealand hotel sector after an Australian spending spree boosted sales across the Tasman by 96%.
Australian hotel sales soared to $A1.5 billion in the 12 months ended June 30, data from commercial real estate firm Jones Lang LaSalle shows. Asian investors accounted for 90% of sales in the period.
That is an average of about 30 Australian hotel sales a year, compared tp New Zealand's four.
"It is more of an Australasian story. But Australia and New Zealand assets from a global point of view are viewed as one economy," Jones Lang LaSalle executive vice-president Dean Humphries told BusinessDesk.
"This year we have seen a large number of investors from Asian countries but, in saying that, there is strong investor demand from other parts of the world because Australasia is seen as a better market to invest in."
"Investors are sourcing debt locally so it's great for our banks. Many are also well capitalised so have the financial capability to reinvest money into the hotels through refurbishment and expansion.
"The Christchurch rebuild is also exciting with the development of new hotels and a convention centre."
New Zealand hotels that have gone under the hammer over the past year include Hotel So Christchurch for $19 million, Wellington's InterContinental for $50 million and Auckland's Hyatt Regency for $59.7 million.
The Hilton Auckland was also sold for an undisclosed sum.
"It is highly unlikely that any other hotel will sell in New Zealand this year – it takes six to 12 months to sell – and there is nothing on the immediate horizon," Mr Humphries says.
"You will see another one or two hotels go to the market in the next year."