One of the world's largest hotel chains has signed an agreement to enter New Zealand with a new $70 million Queenstown property.
Mark Francis, managing director of property specialist Augusta Capital, said Radisson Hotel Group has signed a 15-year hotel management agreement with his firm on a proposed development.
Radisson has more than 1400 hotels around the world and Francis said negotiations had been direct with the business in Singapore.
He anticipates further Radisson hotels in New Zealand: "One would imagine they would not be coming here for just one hotel and our understanding is they are looking at further sites."
Augusta has contracted Christchurch-headquartered Cook Brothers Construction to build the 7500sq m five-level boutique hotel on a former housing land at 17-19 Man St, three blocks back from the lakefront in the centre of the resort town.
Francis said: "This will be the first Radisson Collection hotel in New Zealand, as well as one of two initial seed assets for the Augusta Tourism Fund."
Plans are to open the hotel by early 2022 and Francis said Queenstown was an obvious choice.
"Queenstown is a thriving economic centre and airport passenger numbers, guest nights and annual visitor spend has continued to grow over the past five years. Ongoing sector growth is expected and our strategic collaboration with Radisson Hotel Group places us well to capitalise on this," he said.
Augusta's new tourism fund could hold assets of around $400m in the next few years, Francis said, with plans to expand it fast.
However the fund won't open to investors till February next year and in the meantime, two assets it had were on Augusta's balance sheet, he said: the Radisson and Auckland's new Jucy Snooze hotel on the Cook St/Nelson St corner.
The open-ended unlisted fund will allow investors access to building New Zealand's tourism infrastructure, he said.
"Tourism is of critical importance to the New Zealand economy, having grown to become New Zealand's largest export product, investment in infrastructure is essential in harnessing the benefits of growth. The establishment of the Augusta Tourism Fund represents Augusta's confidence in the strong performance of the sector, as well as forecasted future growth," he said.
"This fund seeks to capitalise on the acute shortage of hotel accommodation being experienced across New Zealand with a focus on Auckland and Queenstown locations, where the two seed assets are located. Current and future investment will be focused on existing operating hotels, as well as hotel development opportunities where an appropriate risk-adjusted return can be achieved for investors," he said.
Augusta has a market capitalisation of $134m and its shares are trading around $1.53.