Hotel property in Aotearoa is typically a stable long-term investment and sales have not been badly affected by rising interest rates, estate agents firm JLL says. (file image) Photo: RNZ / Angus Dreaver
Rebounding international tourism is buoying optimism in the hotel property sector, as prices remain steady.
Commercial real estate firm JLL said deals worth more than $100 million had been completed this year, including the recent purchase of the 253-room Mount Cook Hotel Collection, comprising hotels in Twizel and Omarama, by Distinction Hotels Group.
JLL hotels and hospitality director Nick Thompson said there was a mix of local and foreign private, corporate and private equity buyers, with strong interest from Australia and Asia.
"While other commercial sectors are still encountering headwinds, hotels continue to perform strongly with rebounding international tourism fueling their desirability both domestically and internationally," Thompson said.
"With the recovery coming quicker than some may have expected, we're seeing prices hold quite well and in some cases, even looking at a bit of a lift in pricing."
Some of that activity had been tempered by rising interest rates as rising hotel costs, but as hotel property in Aotearoa was typically a stable long-term investment, OCR rises did not tend to scare buyers away, Thompson said.
"Offshore money is more focused on major centres, mostly because they know that and they understand that more, but there is local money and even sort or regional money that's coming in that is very open to looking at some of the regional locations around the country."
JLL debt advisory head Mark Farrands said the hotel and accommodation sector had gone from strength to strength in the past year.
"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."