Expansion of Tourism Portfolio
POSTED ON: 15 November 2021
Rydges Wellington is the latest addition to a tourism investment portfolio formed in 2019 to invest in New Zealand tourism infrastructure.
Russell Property Group, the investment manager for NZ Hotel Holdings Asset LP, a partnership between NZ Super Fund, The Russell Property Group and Lockwood Property Group has agreements to acquire the Featherson Street property.
The acquisition sees the consolidation of 280 hotel units and related facilities, with the purchase of units from more than 200 individual owners.
Rydges Wellington joins a portfolio that includes the Four Points by Sheraton and Adina Apartment Hotel Auckland, Holiday Inn Rotorua, BreakFree Hotel in Christchurch, and the Sofitel in Queenstown.
Originally developed in 2007 and sold to investors in New Zealand, Australia, Asia and the United Kingdom, the 4.5 star property is the largest hotel in the capital. Its 280 rooms includes 19 suites, and the hotel offers five conferencing spaces, a fitness centre, lap pool, spa and sauna and an award-winning restaurant and bar.
Strategically located near Parliament and adjacent to the harbour precinct, Rydges Wellington is the closest hotel to the Westpac Stadium, and has a strong base of corporate, government and leisure demand.
Russell Property Group Managing Director Brett Russell says the Wellington property is a great addition to the portfolio that solidifies a strong national presence.
“Wellington remains an important tourism destination, as well as a centre for business and politics, and we see strong future demand for hotel assets of this type,” said Mr Russell.
“All staff roles and existing management arrangements will be maintained, and we are delighted to expand our relationship with Event Hospitality & Entertainment Limited NZ (EVT).”
Mr Russell said that, as with the Fund’s acquisition of the Sofitel in Queenstown in March 2021, Rydges Wellington represented an opportunity to consolidate the property under a single owner to make the ongoing investment necessary to ensure a high quality asset into the future.
Body Corporate Chairperson Graham Wilkinson said that while the hotel has traded strongly for the past decade, it was nearing the time for refurbishment and required seismic strengthening to become one of Wellington’s highest seismically rated hotels.
“While it was originally envisaged to fund this work from hotel earnings, the effect of the COVID pandemic on trading has meant this was not possible. Therefore we discussed future options with unit title owners,” said Mr Wilkinson.
“We entered into sale agreements after 98 per cent of owners agreed that a sale was the preferred option. The Body Corporate then received approval from the High Court to complete the process meaning the sale could be declared unconditional, and settlement will take place next month,” he said.
NZ Super Fund Direct Investment Manager Hishaam Mirza says the strategic acquisition in the nation’s capital city supported the Fund’s objectives of developing assets in tourism centres throughout the country, including gateway centres like Wellington, Auckland and Christchurch.
He said that notwithstanding COVID’s interruption to international tourism, it was important to continue to develop the tourism sector, both to support domestic tourism – increasingly important in the short term – as well as ensuring tourism assets continued to be developed for when international borders re-open.