SINGAPORE October 12, 2022: JLL on Tuesday announced the sale of Stamford Plaza Auckland for NZD 170 million, the largest hotel asset in New Zealand history to go unconditional.
The Stamford Plaza, originally branded “The Regent”, was managed and operated by Stamford Hotels & Resorts as part of the Stamford Group for the past 27 years,
The Stamford Plaza has been sold to a consortium comprising the CP Group (New Zealand’s largest hotel owner with a global portfolio of over 50 assets) in association with global investment firm Alvarium Investments through its local office of Auckland and Archipelago Capital.
CP Group believes the time has come to invest in 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-Chairman Andrew Williams views the investment as an important strategic move to add a premium hotel in Auckland to Alvarium’s existing property assets at an opportune time to capitalize on current market conditions.
“We view New Zealand as a secure property market, supported by a rebounding hospitality and tourism sector, and well positioned after the peak of the pandemic,” Williams said. “This co-investment aligns with our long-term approach of working with teams with a proven track record of high performance to drive returns for our clients and our business through timely investment opportunities.”
“Stamford Plaza is the pride and joy of the Stamford Group and was handpicked by Group Chairman CK Ow during its strategic acquisitions in the 1990s across Australasia. The Stamford brand has stood out by 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 a change in the city’s landscape,” said Thomas Ong, COO of Stamford Hotels & Resorts.
“The disposal represents a recalibration of the investment strategy of the group, which has made inroads into other property classes in the global market, such as trophy asset properties in the City of London. The group is well capitalized, debt free and will continue to seek investment opportunities whenever it can add value. In leaving Stamford Plaza, the group is grateful to the loyal, high caliber hospitality professionals who remain on the premises and who will continue to be an asset to the incoming operator.
JLL Hotels & Hospitality Director Nick Thompson said the finalization of a deal of this magnitude proves there was a strong appetite in the New Zealand hospitality sector thanks to market positivity despite the recent market turmoil. the economy.
“The hotel market is trending higher after two years of uncertainty, and this move is indicative of market strength,” he said.
“Hotel investors tend to take a longer-term approach to asset deals, so hotels hold up well when headwinds affect other real estate sectors,” Thompson said. “The sale of Stamford Plaza is a record sale for a single hotel asset in New Zealand, underscoring the resilience of the hotel market complemented by continued interest from international investors over the past 30 months.
“For the consortium, buying a five-star hotel in Auckland’s CBD when the market rebounds represents a fantastic opportunity. Plans to renovate and rebrand the Stamford Plaza under a major international name are already underway, although branding is yet to be decided.
The last equivalent hotel deal in New Zealand over NZD 100 million was in 2006 when the Rendezvous Hotel, now the Grand Millennium Hotel, sold for NZD 113 million through JLL agents. Just over a month ago, Sir Stamford Circular Quay in Sydney sold for AUD 210.5 million, or over AUD 2 million per room. With planned renovations complete, the sale of Stamford Plaza Auckland equates to over NZD 700,000 per room (out of 286 rooms and suites). Two Stamford asset sales in major city centers indicate Australasia is a safe destination to add to portfolios. The disposal of these non-core assets demonstrates the high quality of Stamford’s broader portfolio.
“Visitors to New Zealand, especially 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 travelers land as a gateway to the rest of the country.”
Heading into the final quarter of 2022, the sale of Stamford Plaza Auckland is one of many significant hotel transactions expected to be announced before the end of the year.