New Zealand Hotel transactions pass $100m for the year as rebounding international tourism helps thriving sector duck headwinds

Momentum in the hotel sector has carried through into 2023, with the value of deals that have
gone unconditional this year already passing $100m and more currently under negotiation.

Having transacted the record $170m sale of Auckland’s Stamford Plaza last
October, now refurbished and re-opened as the JW Marriot Auckland, JLL Director
Hotels & Hospitality Nick Thompson says the active New Zealand market is
once again a beacon for investors seeking stable, long-term performance.

“Through the first quarter of this year, we’ve already seen five major deals
go unconditional for a combined total of over $100 million, and there’s more to
come. While other commercial sectors continue to encounter headwinds, hotels
continue to perform strongly with rebounding international tourism, which fuels
their desirability both domestically and internationally.”

The most recent of these deals transacted by JLL is the purchase by
Distinction Hotels Group of the 253-room Mount Cook Hotel Collection in the
South Island, comprising the Mackenzie Country Hotel, Heritage Gateway Hotel
and Countrytime Hotel in Twizel and Omarama.

Geoff Thomson, owner of Distinction Hotels Group, says the return of
international visitors was a key factor in the acquisition, and a growing
influence on activity up and down the country.

“More tourists back on our shores is great news for the hotels and
hospitality industry. Adding three well-positioned assets to our portfolio in
the South Island is exciting and we’re looking forward to integrating the
Distinction Hotels brand into the beautiful Mackenzie District.”

JLL head of Debt Advisory, Mark Farrands, says counter-cyclical activity in
the hotel and accommodation sector is supported by appetite from the funding
market remaining strong.

“At the end of 2022, we received a very strong response from the funding
market for a well occupied student accommodation asset, with 15 lenders
providing attractive indicative terms across a range of banks and non-banks,
both onshore and offshore. Hotels and accommodation, especially in New Zealand,
is a market segment that has performed better and better since 2022 when the
rest of the market slowed.”

According to a Real Capital Analytics report, JLL was the most active broker
in the capital markets sector across New Zealand in 2022, transacting over
NZD$500 million. The analysis also placed JLL as the top-ranked hotel broker in
New Zealand based on sales volume, and the top broker for hotel transactions
across all of Asia Pacific.