JLL Hotel transactions have already passed one hundred million for the year, as international tourism is helping the sector to thrive. The wave has carried into 2023, as the value of hotel deals that have gone unconditional surpassed the milestone, and more deals are said to be under negotiation currently.
Auckland’s Stamford Plaza attracted a one hundred and seventy million dollar sale in late 2022, which has been since re-furbished and re-opened as JW Marriot Auckland. JLL director of hotels and hospitality, Nick Thompson, said that the active market in New Zealand had again encouraged investors who are looking for a stable, long-term performance.
“Through the first quarter of this year, we’ve already seen five major deals go unconditional for a combined total of over one hundred million dollars – and there’s more to come,” said Thompson. “While other commercial sectors are still encountering headwinds, hotels continue to perform strongly with rebounding international tourism fueling their desirability both domestically and internationally.”
Mark Farrands, JLL head of debt advisory, said that the counter-cyclical activity currently in the hotel and accommodation industry has been supported by the growing appetite from the funding market which remains strong.
“At the end of 2022, we received a very strong response from the funding market for a well-occupied student accommodation asset, with 15 lenders providing attractive indicative terms across a range of banks and non-banks, both onshore and offshore,” said Farrands.
“Hotels and accommodation, especially in New Zealand, is a market segment that has performed better and better since 2022 when the rest of the market slowed.”
The most recent deal made by JLL was the purchase by Distinction Hotels Group, a 253-room Mount Cook hotel collection. The deal comprised Mackenzie Country Hotel, Heritage Gateway Hotel, and Countrytime Hotel in Twizel and Omarama.
Distinction Hotels Group owner, Geoff Thompson said that the return of international visitors was a key factor in the acquisition. Growing influence on activity up and down the country was another key factor he noted.
“More tourists back on our shores is great news for the hotels and hospitality industry. Adding three well-positioned assets to our portfolio in the South Island is exciting and we’re looking forward to integrating the Distinction Hotels brand into the beautiful Mackenzie District,” said Thompson.
