Investment demand for New Zealand hotel assets remains high from both offshore and domestic investors, according to new analysis from Colliers International.

However, transaction volumes have declined over the last two years — not for lack of demand, but because owners are retaining assets due to favourable tourism and property market conditions.

Colliers International's New Zealand Hotel Sales Research and Analysis report shows the volume and value of sales took a dip in the 24-month period ending December 2018.

In the wider New Zealand market, there were 19 hotel sales totalling approximately $300 million in the 2017/2018 period, down from 29 sales totalling more than $500m over the 2015/16 period.

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Colliers International hotels national director Dean Humphries says investor inquiry is as high as ever, but opportunities are scarce.

"Hotel assets remain tightly-held with owners electing to retain, based on buoyant trading conditions and further capital appreciation expectations," he says.

Humphries says the majority of recent sales, by volume and value, took place in the second half of 2018, when seven hotels transacted at a total of $168m.

Major sales included the Waldorf Stadium Apartment Hotel and Best Western President Hotel in Auckland; CQ Hotels Wellington; and the Novotel New Plymouth.

The sale of the Waldorf Stadium Apartment Hotel was the largest hotel transaction in New Zealand since 2015 and the first major hotel to be sold in the Auckland CBD since the Hilton Auckland in 2012.

Humphries says offshore investment remains strong despite recent changes in overseas investment rules.

"Nationally, offshore investors accounted for approximately 58 per cent of all transactions by value, evenly spread between Australia, Singapore and China," he says.

"Auckland was the most sought-after place for investment, representing 43 per cent of all transactions by volume, followed by Wellington on 18 per cent."