New Zealand's second largest hotel, The Langham hotel on Auckland's Symonds Street city ridgeline, is up for sale and is being marketed internationally.
"This is the first time in almost five years that a five star hotel has come on the New Zealand market for sale," says Warren Hutt senior director of CBRE who, with colleagues Peter Hamilton and Rob Cross, is exclusively selling the hotel at 77-83 Symonds St by way of an international expressions of interest campaign, with a closing date of April 12.
Occupying 13,192 sq m of freehold land The Langham has a total of 411 guest rooms along with some of the city's top conference, meeting and event facilities. The complex encompasses three dining rooms, café and bar facilities including the popular Eight Restaurant; the award-winning Chuan Spa; a fully equipped fitness centre and a rooftop swimming pool patronised by guests and outside customers.
Hutt says the sale represents a landmark opportunity with The Langham being a very attractive property asset for a number of reasons.
"Firstly, it is a superb, premium-rated hotel in a national market that has very few of them. Secondly, it sits at the main gateway of New Zealand's booming tourist market. Thirdly, very few five star New Zealand hotels are offered to the market with hotels of this size, quality and location coming to the market on a decade by decade basis. Finally, it occupies an under-used site, so there is potential for further development potential.
"Operated by the Langham Hospitality Group its conference facilities are also among the very best in the country."
Hutt says Auckland is the strongest performing hotel market in the country with considerable future scope and potential as tourist numbers continue to skyrocket.
"Last year, a record three million visitors came to New Zealand, and 70 per cent of those visitors arrived into Auckland."
Cross, who is national director with CBRE Hotels Australia, New Zealand and the Pacific, says that recent studies put the average international visitor stay in CBD commercial accommodation at 2.1 nights.
"The five star sector experienced particularly strong growth with the average daily rate for 2015 up 13 per cent on 2014 levels. More importantly, the revenue per room for the five star sector shot up by 15 per cent in 2015 from the previous year; and New Zealand hotels as a whole saw an increase of 16 per cent in gross operating profit per available room in the same period.
"The hotel sector has become the darling of the New Zealand commercial property sector," Cross says.
Hutt says the sale of The Langham Auckland represents the chance to purchase a high profile hospitality industry property asset that has long term investment prospects."
"We are offering an exclusive opportunity to acquire one of the country's top hotel assets and a well-performing business in one of the most attractive investment locations in the world.
"Additionally, the large 1.3 hectare freehold land parcel occupied the hotel has the potential to develop about 29,000 sq m of gross floor area across the site with additional accommodation, residential apartments or car parks."
Cross says that the combined hotel and future development opportunity is likely to be of interest to local and offshore high net worth individuals, large private organisations and institutional investors.
"We're undertaking an investor roadshow across Asia, where we expect to see strong interest from prospective buyers in Hong Kong, Singapore and China in particular. The Langham Hospitality Group is a wholly owned subsidiary of one of Hong Kong's leading property and hotel companies, Great Eagle Holdings, so it already has a strong Asia-Pacific connection that we know will be of interest to the market.
"This will be a fiercely competitive process, as investors understand the value of the hotel and future development opportunity on offer, so we're actively engaging with our clients and the wider international market."
Hamilton, director of hotels for CBRE New Zealand, says The Langham Auckland's scale is matched only by its quality.
"The Langham Auckland was most recently awarded the title of Luxury Classic Hotel of the Year at 2015's Luxury Travel Guide Global Awards in addition to Trip Advisor recognition in the form of its Traveller's Choice Award in 2015.
"Built in 1983, it's a stunning European styled property comprising the main hotel building and a large 208 space car park. Its opulent interior contains an elegant lobby, dazzling chandeliers lining high ceilings and similar glamourous touches throughout the complex.
"In relation to conferences and events, The Langham Auckland has 15 adaptable venues, lavish ballrooms and the capacity to host up to 1400 delegates. These facilities were recently refurbished and extended and are now among the city's most sought-after venues for corporate functions, seminars, balls, banquets, expos and weddings."
Hamilton says the hotel will continue to be managed by the internationally acclaimed Langham Hospitality Group and operated under the Langham hotel brand.
"This will give interested parties added confidence that the property will continue with its current strong performance after a sale is completed.
"The Langham Auckland trades extremely well, with strong revenue growth and improving profit conversions in recent years. In 2015 the hotel achieved high occupancy rates and management is budgeting for a similar rate this year along with an increase in room rates and revenue as the market continues to improve."
"With a limited supply of new hotels on the horizon, The Langham Auckland is also poised to capitalise on Auckland's projected rapidly growing accommodation demand," Hamilton says. "Along with a substantial growth in inbound tourists, New Zealand's hospitality sector is benefiting greatly from the strength of a domestic economy which is presently one of the strongest in the world. All the market conditions are therefore lined up to make this hotel sale an exceptional one.
"Furthermore, a recent independent master plan analysis has identified that, having four road frontages in a key part of the city; there is the potential for the development of apartments on the site. There is currently a shortage of apartment development sites in the CBD and, with pressures on housing remaining in place, so we're seeing an incredibly strong demand for apartments."
Cross says the Langham Auckland occupies a prime position towards the southern end of the Auckland CBD, with frontages to Symonds St, City Rd, Liverpool St and Karangahape Rd.
"The hotel sits in a landmark spot on an elevated ridge offering guests expansive city and harbour views from a number of rooms.
"Ideally situated near the top of Queen Street, The Langham Auckland is close to the numerous attractions, retail and entertainment amenities that this world class city has to offer."
Hutt says this is an ideal time to purchase an Auckland hotel with international tourist arrivals to New Zealand now hitting record levels, "The city has a rapidly increasing numbers of flight connections to a growing number of destinations and Auckland International Airport is undertaking major developments that will include a $180 million investment to accommodate a forecast 40 million annual passengers by 2044. Those infrastructure developments and continued growth in the tourism sector means that visitor numbers are set to continue their upwards trajectory in the coming years," says Hutt.