SINGAPORE 12 October 2022: JLL announced Tuesday the sale of the Stamford Plaza Auckland for NZD170 million, the largest ever single hotel asset in New Zealand history to go unconditional.
The Stamford Plaza, which was initially branded as “The Regent”, was managed and operated by Stamford Hotels & Resorts as part of the Stamford Group for the past 27 years,
The Stamford Plaza was sold to a consortium comprising the CP Group (the biggest hotel owner in New Zealand with a global portfolio of over 50 assets) in association with global investment firm Alvarium Investments via its locally owned Auckland office and Archipelago Capital.
CP Group believes now is the right time to buy into the New Zealand market following the opening of international borders in the country and the stability of the commercial property sector.
Alvarium Investments founder and global co-chair Andrew Williams considers this investment an important strategic decision to add a premium Auckland hotel to Alvarium’s existing real estate assets at an opportune time to capitalise on current market conditions.
“We see New Zealand as a secure real estate market, buoyed by a rebounding hospitality and tourism sector, and well-positioned post the peak of the pandemic,” says Williams. “This co-investment aligns with our long-term approach of working with teams with a proven high-performing record to drive returns for our clients and our firm through timely investment opportunities.”
“Stamford Plaza is the pride and joy of the Stamford Group and was hand-picked by CK Ow, group chairman, during his strategic acquisitions in the ’90s throughout Australasia. The Stamford brand has been outstanding in adding value to the quality of five-star hotels in New Zealand. In October 2008, the Stamford Group not only upgraded the hotel but added 149 ultra-high-end luxury apartments, contributing to the change in the city landscape,” said Stamford Hotels & Resorts COO Thomas Ong.
“The divestment represents a recalibration of the group’s investment strategy, which has made in-roads into other real estate classes within the global marketplace, such as trophy asset properties in the City of London. The group is well-capitalised with no debts and will continue seeking investment opportunities whenever it can add value. In relinquishing Stamford Plaza, the group is grateful for the long-serving high calibre and loyal hotel professionals remaining within the premises who will continue to be an asset to the incoming operator.”
JLL Director Hotels & Hospitality, Nick Thompson, said finalising a deal of this magnitude proves there was a strong appetite across the New Zealand hotel sector thanks to positivity in the market despite recent turbulence in the economy.
“The hotel market is trending upwards following two years of uncertainty, and that movement is indicative of the strength of the market,” he said.
“Hotel investors tend to take a longer-term approach to asset transactions, so hotels hold up strongly when headwinds impact other real estate sectors,” said Thompson. “The sale of the Stamford Plaza is a record sale for a single hotel asset in New Zealand, pointing to the resilience of the hotels market complemented by continued interest from international investors over the past 30 months.
“For the consortium, purchasing a five-star hotel in Auckland’s CBD when the market rebounds represents a fantastic opportunity. Plans to refurbish and rebrand the Stamford Plaza under a major international name are already underway, although branding is still to be decided.”
The last equivalent hotel transaction in New Zealand of over NZD100 million was in 2006 when the Rendezvous Hotel, now the Grand Millennium Hotel, sold for NZD113 million via JLL agents. Just over a month ago, Sir Stamford Circular Quay in Sydney sold for AUD210.5 million, equivalent to over AUD2 million per room. Once planned refurbishments are completed, the Stamford Plaza Auckland sale equates to more than NZD700,000 per room (across 286 rooms and suites). Two Stamford asset sales in major city centres indicate Australasia is a safe destination to add to portfolios. The divestment of these non-core assets demonstrates the high quality of the broader Stamford portfolio.
“Visitors to New Zealand, particularly tourists, tend to stay longer given the travel time required to access the country,” says Thompson. “This makes hotel assets desirable investments, particularly in Auckland where 70% of international travellers land as the gateway to the rest of the country.”
Heading into the final quarter of 2022, the sale of the Stamford Plaza Auckland is one of several significant hotel transactions expected to be announced before the year’s end.
(Source: JLL)
