Two of New Zealand’s largest provincial hotels are on the market.
The Kingsgate Hotel Whangarei at 9 Riverside Drive, Riverside, and the Kingsgate Hotel Hamilton at 100 Garnett Avenue, Te Rapa, are being marketed for sale, individually or together, by Dean Humphries of Colliers International. These assets will be sold by way of Expressions of Interest closing 4pm Tuesday October 6, 2015.
Humphries, Colliers’ National Director of Hotels, says these hotels represent an exceptional opportunity to acquire significant real estate assets in two of New Zealand’s largest and fastest growing regions.
“Assets of this nature are rarely sold on the market, and due to the value of the underlying land and high building costs they are unlikely to ever be replaced in their current format. They will provide investors with very attractive returns over the medium to long term.”
Humphries says, as an added appeal, new owners have the option to retain the existing hotel company to manage the properties on their behalf or buy them with vacant possession.
“Both hotels are currently being managed by the prominent hotel operator Millennium & Copthorne Hotels under its popular 3 to 3.5 star Kingsgate brand.
A new investor can therefore choose to retain this group to manage the hotels or appoint a new hotel company under a different brand. Alternatively both hotels could be purchased by an owner operator, or family business, that elects to operate the hotels themselves.”
The two properties have been owned by the same family since they were built (Whangarei in 1986 and Hamilton circa 1998) and they are now selling them as part of a wider divestment strategy.
The Kingsgate Hotel Whangarei - located in close proximity to the Whangarei CBD overlooking the Town Basin and marina - comprises 115 guest rooms and includes a large conference and banquet facility as well as a restaurant and 24 hour reception. It is the largest accommodation provider in New Zealand’s northern most city, which is just a two hour drive from Auckland.
The Kingsgate Hotel Hamilton comprises 147 guest rooms and boasts the city’s biggest conferencing facility with capacity for up to 600 people.
The Kingsgate is the second largest accommodation provider in Hamilton, New Zealand’s fourth largest city, and is located on a large, two hectare parcel of freehold land in the new Hamilton business hub of Te Rapa just 90 minutes drive from Auckland International Airport.
Humphries says there has never been a better time to own a hotel asset in New Zealand.
“Tourism demand is running at record levels and annual international visitors have now exceeded three million people. This is an increase of more than 7% in the past 12 months and has resulted in record occupancy and increasing room rates which are driving both profitability and property values higher.”
The New Zealand tourism market and hotel sector is running at historically high growth levels. Occupancy in our major tourism markets is surging to over 77% and room rates across the country have increased by 5% in the last year.
This comes with a backdrop of a virtual hiatus of new hotel development that is creating greater demand and culminating in one of the strongest tourism markets in New Zealand for decades. A falling New Zealand dollar is only expected to add to this demand by attracting more tourists to the country in the short term.”
Humphries says that growth in the tourism sector is not limited to our largest cities.
“We are also seeing increasing demand in many provincial cities such as Whangarei and Hamilton - both of which are satellite cities to Auckland, the international gateway to New Zealand.”