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New Zealand's biggest hotel has sold for a record $113 million, giving Australian property company Abacus a $17 million profit after just four months of ownership.
CDL Hospitality Trusts of Singapore this week bought the Rendezvous Hotel Auckland - formerly the Carlton Hotel - from ASX-listed Abacus Property
Group.
That deal follows the hotel's $96 million sale in June to Abacus by Carlton Group, owned by the Li family of Hong Kong.
Mike Batchelor of agency Jones Lang LaSalle Hotels, who brokered the deal, said even though Abacus had bought the hotel only in June, it had added value by negotiating a long-term lease to Rendezvous Hotels (NZ).
Frank Wolf, managing director of Abacus, said the sale to CDL was subject to the Overseas Investment Office's approval. Abacus had sold the hotel subject to a 10-year lease to Rendezvous and had given CDL a three-year rental top-up guarantee. At $113 million, rooms in the 455-room hotel at the intersection of Mayoral Drive and Vincent St went for more than $248,000 each.
The Singapore buyer is that country's first listed hospitality real estate investment trust and part of the same group which has two NZX-listed entities. Millennium & Copthorne Hotels, which is listed in London, has a 70 per cent stake in Millennium & Copthorne Hotels NZ, which owns 63 per cent of CDL Investments.
In June, David Bastian of Abacus said his company had bought the Carlton hotel. The management contract was up for sale and groups then understood to be interested included Sheraton, Marriott, InterContinental and Sofitel.
But Rendezvous Hotels & Resorts International took over managing The Carlton last month and renamed the property.
Dean Humphries, Jones Lang's hotel head in New Zealand, said Rendezvous had taken over the hotel's lease eight weeks ago.
"Rendezvous were prepared to offer Abacus a 10-year lease as opposed to a management agreement, but the lease was more attractive because the owner gets more guaranteed revenue," he said. "The property has sold for a much higher price than in June because of the secure lease in place."
The five-star Rendezvous sits on a 5910sq m site, has five restaurants and cafes, 250 carparks, a ballroom and conference facilities.
An international survey by Jones Lang LaSalle showed Auckland was the third most popular place in the world for hotel investors, after Beijing and Bali. "Australian investors, frustrated by the lack of quality assets for sale in Australia, are starting to look offshore, in particular to New Zealand," the survey said.
And while investors want properties in New Zealand, hotel developers are shunning the country because of its high land prices.
Auckland is the least popular place to build a new hotel in the world, the survey found. It topped the poll as the worst choice for hotel developers, followed by Melbourne and Brisbane.
