New Zealand top hotel sale for 2020 is also one of the first collective sales of a strata titled development
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New Zealand top hotel sale for 2020 is also one of the first collective sales of a strata titled development
The recent sale of Sofitel Queenstown was the largest hotel transaction in the country in 2020, brokered by Dean Humphries, National Director of Colliers International’s Hotels team.
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Colliers International
The recent sale of Sofitel Queenstown was the largest hotel transaction in the country in 2020 but the intricate detail involved in acting on behalf of multiple owners and becoming one of the first multi-unit collective deals to be undertaken in New Zealand, was the real crux of this transaction.
Brokered by Dean Humphries, National Director of Colliers International’s Hotels team, the five-star Sofitel Queenstown Hotel & Spa will form part of the $300+ million hotel portfolio established by the Russell & Lockwood Property Groups in partnership with the New Zealand Superannuation Fund under the New Zealand Hotel Holdings Asset LP ('NZHHALP') entity in 2019.
Mr Humphries said the amalgamated/collective option was a complex strategy that took eight months in negotiating but proved the optimal solution in securing a optimal price for all parties concerned as well as providing the best possible outcome for the future of the hotel itself.
“Individual sales would have seen owners competing with each other for limited buyers and while the hotel had been performing well, it was the right time for a new ‘collective’ owner to look at repositioning the asset.
“Under New Zealand law, you cannot force individuals to sell a strata-title unit even if a majority of unitholders agree to sell, without in many cases a lengthy legal process. Therefore, the major aspect of the strategy was to ensure all of the owners were on board at a pre-agreed price and in the knowledge that a suitable buyer could be found.
“We were lucky to have local businessman, Graham Wilkinson acting on behalf of the owners during the process,” he said.
In 2010, Mr Wilkinson secured a controlling stake in the property and had since been working on a consolidation model for the hotel.
Mr Humphries added that while the pandemic had created challenges, he believes it helped in some way getting the sale over the line given the short-term uncertainty of investment returns to existing unit holders.
“The acquisition reflected the new owner’s strong confidence in the medium/long-term future of New Zealand’s tourism industry,” he said.
Located on a strategic parcel of leasehold land in the heart of Queenstown, the hotel comprises 82 luxurious guest rooms together with a multitude of retail/commercial units.
Originally developed in 2005, the hotel was subsequently sold down as a multi-title development to a range of local and offshore investors. The new owner is reported to have paid in the vicinity of circa NZ$60 million for the asset.
The hotel is one of the country's best performing assets and provides exposure to one of New Zealand's premier tourist destinations.
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