investment portfolio for sale
A portfolio of four Auckland hotel, lodge and commercial properties, three of which are occupied by award-winning tour and accommodation provider Haka Tourism Group on ten-year leases, are up for sale.
Three of the properties are located on the Karangahape Rd ridge and one in Newmarket. They are being put up for sale by Auckland property developer and investor Andy Davies best known for his Ponsonby Central development.
The offering comprises a new Haka Hotel opened early this year at 9 Manukau Rd, Newmarket, the Haka Backpackers’ Lodge at 373 Karangahape Rd, an adjoining multi-tenanted three-level commercial building at 375 Karangahape Rd and another recently completed Haka Hotel at the rear of these two buildings at 2 Day St.
The portfolio is currently generating total annual rental income of $1.813 million, with future agreed stepped rental increases to approximately $2.23 million.
Bayleys Real Estate has been appointed to sell the properties by international tender, closing at 4pm Thursday November 1, unless all or any of the properties are sold prior. Tenders can be lodged for the entire portfolio or for one or more individual properties.
The properties are being marketed through Nick Thompson, Bayleys’ director – hotels and tourism; international sales director James Chan; and Damien Bullick, senior commercial broker with Bayleys’ Auckland city & fringe division.
Andy Davies’ association with the Haka Tourism Group dates back to 2015 when he refurbished and seismically strengthened a vacant character building which he owned at 373 Karangahape Rd for their Haka Lodge accommodation chain. The Haka Lodge Group, which targets the upper end of the backpacker market, was established in 2010 and also has premises in Paihia, Taupo, Christchurch and Queenstown.
Davies then developed a new 11-storey building (leased and operating as Haka Suites Hotel) on his property at 2 Day St and also fully refurbished his 9 Manukau Road property for hotel use and leased this to the Haka Tourism Group for a second hotel. Originally it was a five-level office building developed in the 1970s and later converted to residential accommodation.
Nick Thompson says the development of the Haka Hotel brand follows on from and complements the success of sister brands Haka Tours, which specialises in individually customised small group tours, and Haka Lodges.
“Their focus is on the three and four star sector of the hotel market where there is plenty of opportunity to improve traveller experiences and they are looking to establish eight more hotels around the country in the next five years.
“Their aim is to provide well priced, quality hotel
accommodation based on personalised service, contemporary
designs and furnishings and innovative technology. The two
Haka hotels that are already operating have received a very
positive response from the market, with a high level of
favourable online reviews.”
The Haka Tourism Group is a group of private companies owned by The Sanders Whānau Trust, and was established in 2007 by Ryan Sanders who quit his corporate job with the Royal Bank of Scotland to establish Haka Tours.
Today, the Haka group incorporates nine separate businesses, employs over 150 people and is one of New Zealand’s fastest growing and most awarded tourism operators. It picked up four major honours at the 2017 New Zealand Tourism Awards, including the prestigious Air New Zealand Supreme Tourism Award as well as business excellence and marketing awards.
Ryan Sanders, the director of the companies in the Haka Group, also won the Tourism Champion Award for his "visionary and influential leadership” at the NZ Tourism Awards, and was also named as Canterbury’s Emerging Leader at the Westpac Canterbury 2018 Business Awards. The Haka Group has also been announced as finalists in the customer service and marketing awards categories for Westpac’s 2018 Auckland Business Awards.
“The Haka Group is now an internationally recognised force in tourism,” says Thompson. “In the last three years the group has grown at an average of 60 per cent year on year and since 2010 Haka have won over 30 awards in a wide range of categories.”
James Chan says an attractive feature of the Haka hotel leases for investors is their annual fixed rental increases.
“There are stepped annual increases in the first four years of the new 10-year Day Street and Manukau Rd leases which takes into account the fact that in the early years of their operation, hotels have higher outgoings and need time to build up occupancy rates. After that there will be two-yearly CPI adjustments.”
Damien Bullick says the Haka Hotel building at 2 Day St has become something of a night time central Auckland landmark because of its distinctive, multi coloured patch work of lighting and its high profile position overlooking the motorway network on the Karangahape Rd ridge line.
The high rise 4-star hotel offers guests unobstructed, wide ranging Harbour Bridge, Waitemata harbour and CBD views with a mix of studio, one and two bedroom suites.
The property is currently generating net annual rental income of $840,000 plus GST which will increase through fixed annual rental increases to $1,080,000 plus GST from October 2020.
The Manukau Rd property is a 3-star hotel and lodge offers 63 rooms, including a manager’s suite, plus on-site car parking.
The property’s current annual rent from its lease to the Haka Hotel Group is $578,596 plus GST, including income from two telecommunications leases, however will increase to a minimum of $738,596 plus GST by December 2020.