The large Auckland hotel property recently sold in Auckland's CBD is being expanded in a $12.5m project to push capacity from 178 to 244 rooms.
The former Waldorf Stadium Hotel at 40 Beach Rd near the Spark Arena was sold last August for $57.25m plus GST to Malaysian-owned Mulpha Group.
Now, it has been re-branded Nesuto Stadium Apartment Hotel Auckland and construction work is under way so more guests can stay there.
Nesuto is a reference to the word nest in Japanese.
Mark Ronfeldt, Nesuto Daiwa Living Group chief executive, said 72 two-bedroom rooms would become 144 hotel rooms but extra work on the property would take the total number of rooms to 244 by January next year.
Waide Construction won the contract.
"Auckland continues to grow as the major corporate, events and tourism destination in New Zealand," Ronfeldt said.
Last October, Colliers announced the 4.5 star Waldorf Stadium Apartment Hotel had sold to Australian based Mulpha Group.
Colliers and CBRE said an international sales campaign yielded many bidders wanting to take advantage of New Zealand's current tourism boom and strong hotel market fundamentals.
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The 178-unit strata title development was sold subject to a new 11-year performance lease underpinned by serviced apartment business Daiwa, with a market capitalisation of US$19b two years ago, Colliers said.
The entity bought the Australia and New Zealand Waldorf apartment business with plans to expand here.
Greg Shaw, Mulpha chief executive, said the strong underlying fundamentals driving the New Zealand tourism and hotel sectors were some of the main reasons Mulpha was investing in the New Zealand hotel sector.
"In terms of the Waldorf Stadium Hotel, we were attracted to its position in a key gateway city, strategic location in the heart of the Auckland CBD, together with several strategic opportunities to add additional value to this asset over the short to medium term working in conjunction with the hotel operator Daiwa House Group."
Dean Humphries, Colliers's national hotel director, said the transaction was the first major hotel sale in the Auckland CBD since the Hilton Auckland sold in 2012.
"It is also the largest hotel transaction in Auckland in 12 years since the Carlton on Mayoral Drive sold for $113 million in late 2006," Humphries said last year.
"The new owners saw an opportunity when they purchased this asset to expand the existing room inventory by converting some of the larger apartments into more units. This was one of the key drivers when they were looking to acquire the asset," Humphries said today.
The 10-level hotel was built in 2008, is 10,630sq m on a 2450sq m site subject to a long-term ground lease to Ngati Whātua.
A New Zealand market report by Horwath HTL out in June said the hotel industry had experienced a significant period of growth in revenue and profitability, but the outlook for further improvement was uncertain.
In Auckland, the average room rate had fallen in the year to April, down from $195 to $193/night, that showed.
Auckland has a large pipeline with 13 new hotels and 1522 rooms due to open in the next two years. That was a 16 per cent increase in supply and 53 per cent of them will be 5-star, the report said.
Twelve of 23 extended stay apartment complexes previously called Waldorfs here and in Australia have been renamed Nesuto.
A company statement said future developments would be called the same and the business was planning to develop 1500 to 5000 rooms by 2024.
Nesuto's parent Daiwa House Industry late last year finished a full acquisition of outstanding shares under two subsidiaries.
A new development is under way at Western Australia's Curtin University as part of a A$350m transformation of that campus and surroundings.
New properties in Brisbane and Melbourne are also in heads of agreements negotiations, the statement said.