Asian investors look to NZ after Australian hotel spending spree
By Hannah Lynch
Sept. 11 (BusinessDesk) - Asian investors are looking to the New Zealand hotel sector after an Australian spending spree boosted sales across the Tasman by 96 percent.
Australian hotel sales soared 96 percent to A$1.5 billion in the 12 months ended June 30, according to data from commercial real estate firm Jones Lang LaSalle. Asian investors accounted for 90 percent of sales in the period.
That's an average of about 30 Australian hotel sales per year, compared with New Zealand's four.
"It is more of an Australasian story - but Australia and New Zealand assets from a global point of view are viewed as one economy," Jones Lang LaSalle executive vice president Dean Humphries told BusinessDesk. "This year we have seen a large number of investors from Asian countries but in saying that there is strong investor demand from other parts of the world because Australasia is seen as a better market to invest in."
Investors are sourcing debt locally so it's great for our banks - many are also well capitalised so have the financial capability to reinvest money into the hotels through refurbishment and expansion, Humphries said. The Christchurch rebuild is also exciting with the development of new hotels and a convention centre.
New Zealand hotels that have gone under the hammer over the past year include Hotel So Christchurch for $19 million, Wellington's InterContinental for $50 million and Auckland's Hyatt Regency for $59.7 million. The Hilton Auckland was also sold for an undisclosed sum.
"It is highly unlikely that any other hotel will sell in New Zealand this year - it takes six to 12 month to sell - there is nothing on the immediate horizon," Humphries said. "You will see another one or two hotels go to the market in the next year."