Hotel operators and investors in New Zealand can expect a continuation of positive trading performance and potentially greater investment returns during 2008.
According to Jones Lang LaSalle Hotels, demand is also strong for quality assets outside of the major cities where higher yields are being achieved.
"As a result of this strong demand, Jones Lang LaSalle Hotels is pleased announce the sale of 92 units contained within Hawkes Bay's largest and only four star hotel – The Scenic Circle Te Pania Hotel," said Mr Dean Humphries, National Director, Jones Lang LaSalle Hotels New Zealand.
With ocean views from all units, The Te Pania Hotel enjoys a superb waterfront location in the heart of Napier's famous art deco precinct. "The Hotel also benefits from Hawkes Bay's largest convention centre and recently completed Ocean Spa Complex located across the road," said Mr Humphries.
The impressive six-storey hotel features a total of 109 waterfront units; with 92 units to be sold ‘in one line or in parcels' together with the restaurant and bar facilities. Scenic Circle Hotel group manage the hotel under a long term commercial lease, which will be unaffected by the sale of the 92 units. The Scenic Circle Hotel Group is New Zealand's largest independently owned hotel operator.
Other features of the property, which has been designed to complement its Hawke's Bay setting, includes the Exchange Brassiere and Bar with alfresco dining, a fitness room, 24 hour reception and guest parking.
Visitor arrivals to New Zealand are forecast to increase over the medium term. "This growth bodes well for further increases in room rates and is part of the attraction of investment in the hotel sector at present," said Mr Humphries. He added, "With room rates expected to grow steadily over the medium term, we should in turn witness a general improvement in property values."
Hotel trading performance in New Zealand's provincial areas has been tracking upward in the same manner as their major CBD counterparts. "Average occupancy rates for our top performing hotels in most of our key provincial cities, such as Napier, are now approaching 70% with room rates showing continued improvement," said Mr Humphries.
Hotels Tightly Held in New Zealand
In excess of $600 million worth of major hotels have transacted in New Zealand over the past three years, predominantly in the main cities of Auckland, Wellington and Christchurch. Major sales have included the Carlton Hotel Auckland - the largest single hotel transaction to ever occur in New Zealand which set a new country record at NZ$113 million.
Hotel investment liquidity softened through 2007 primarily due to the lack of available assets for sale. "Whilst we anticipated a stronger level of hotel transaction activity during the past 12 months, hotels remain tightly held in New Zealand," said Mr Humphries.
"The recent sale of the Park Hyatt Sydney, to a private Japanese property investor for $A201.6m, was a landmark deal in the Australian hotel market and further indication of the strong appetite for hotel investments in this region," said Mr Humphries.
"However, in the past 12 months we witnessed hotel sales cascade into key provincial locations such as Rotorua, Palmerston North and parts of the South Island of New Zealand," said Mr Humphries. Recent major hotel sales include the Grand Tiara Rotorua, Novotel Palmerston North Hotel, Mount Aspiring Hotel in Wanaka and The Yacht Club Hotel in Picton.