The sale of the Waipuna Hotel and Conference Centre demonstrates the strong demand which exists for substantial, well-located accommodation assets, despite the short term challenges facing the Auckland hotel market.
Following the successful conclusion of an on-market campaign undertaken by CBRE, national private investment company Primeproperty Group will take over the facilities as part of its Prime Hotels portfolio, continuing its current operation as a hotel and conference centre.
The 2.5 hectare land holding on the edge of the Panmure Basin sold for $38.5 million, reflecting a per-room price of $260,000 and a 5% initial yield.
CBRE director Natasha Sarkar, who handled the on-market sales campaign with colleagues John Holmes, Brent McGregor and Warren Hutt, says the transaction is notable at a time when very few hotel assets are changing hands.
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“The hotel market in Auckland is facing short term headwinds, with an increase in room supply and lower occupancy rates.
"However the Waipuna Hotel attracted strong buyer participation because of its large land holding and its substantial, well-established facilities which are adaptable for a wide range of uses.”
CBRE’s campaign targeted traditional hotel investors both locally and offshore, as well as church groups, education institutions, healthcare providers, residential developers and retirement village operators, says Holmes.
“What set this asset apart was its broad appeal to a range of buyer groups, as well as its significant waterfront land holding. Enquiry levels during the campaign were the strongest of any on-market campaigns we have run in the past two years,” he said.
“This strong interest culminated in eight formal bids - a level that we have not seen since before Covid.
"It’s also notable that the bids were received before the first OCR cut had been announced, further demonstrating the strong asset-specific investment fundamentals of this property.”
Of the eight bids received from around the country and offshore, four were hotel operators attracted by the opportunity to own a well-established asset that caters to a variety of visitor markets including conferences and the re-emerging Chinese tour market, McGregor says.
“One theme that emerged among the buyers in the hotel sector was the desire to position themselves to benefit from the continuing recovery of the post-Covid tourism market, despite the recent challenges facing the Auckland hotel sector.
"The fact that this asset is not a CBD hotel but an asset catering to a wider conference and tour market, along with a very significant underlying land holding, was a key attraction for buyers.”
The other four bids were from parties in the aged care, church, education and healthcare sectors, further demonstrating the attractiveness of the site’s location, large land holding and adaptability to a range of different uses, Hutt adds.
Inquiries were also received from residential developers, owing to the site’s large area of undeveloped land with a 230 metre waterfront frontage.
The complex is one of the largest and most comprehensive conference facilities in New Zealand. Developed progressively from 1966 through to 1990, it includes several buildings housing 148 hotel rooms, 17 conference and meeting rooms, a 400 seat tiered theatre, restaurant & bar, pool, spa and gym. 300 car parks are also on site.
Prime Hotels is part of the Primeproperty Group (PPG), a 100% New Zealand-owned and operated private property investment company.
Prime Hotels has over 30 years of experience running hotels, with a diverse portfolio that includes hotels in Wellington and Tauranga, along with leisure accommodation in Turangi, Taupō and Whitianga.
PPG also owns and operates restaurants, car parking buildings, residential developments, a shopping mall and residential accommodation.
- Supplied by CBRE
