New Zealand's hotel investment market looks set to follow the buoyant conditions, being experienced in Australia. 

According to Mr Mike Batchelor, Executive Vice President, Jones Lang LaSalle Hotels, "In excess of AUD$2 billion worth of hotels have changed hands over the past 18 months in Australia with a flow through effect to New Zealand hotel assets now underway."

His comments follow the recent sales of the Duxton Hotel portfolio in Wellington, Auckland and Rotorua to the Amora Group from Thailand and the InterContinental Hotel in Wellington to Australian based Eureka Group, also sold by Jones Lang LaSalle Hotels as part of the IHG portfolio of 10 hotels.

"The strong trading outlook, limited supply of new hotels, continued demand growth and the reducing pool of investment grade property have resulted in investor confidence returning to the tourism sector," said Mr Batchelor.

The profile of investors seeking New Zealand assets is evenly spread between private companies from the Asia Pacific region and property funds / institutions looking to diversify their portfolios.

"The fact that  hotel room rates in many centres have only recovered in 2005 to levels experienced 10 years ago, combined with the ability to buy hotels below replacement cost is  fuelling the view the tourism sector provides excellent  growth potential," said Mr Batchelor.  Visitor arrivals grew by another 7% for the 12 months to June 2005 to reach 2.4 million arrivals.

Mr Peter Coman, Managing Director, Jones Lang LaSalle commented he was not surprised with the recent resurgence of interest in Hotels following the dramatic increase in demand for commercial, industrial and retail assets.