The Grand by SkyCity has been placed on the market by CBRE, offering hotel investors and operators a significant opportunity to acquire and rebrand a substantial CBD hotel asset in the heart of the SkyCity precinct.
The property, at 90 Federal Street, Auckland, comprises a vast entertainment and accommodation complex spread over approximately 47,500sqm of floor area; including the 312 room hotel, restaurants, tourism attractions and car parking.
It also offers a direct internal link with the newly-opened New Zealand International Convention Centre (NZICC).
CBRE Hotels director Peter Hamilton is marketing the property with CBRE Capital Markets senior director John Holmes through an international expressions of interest campaign closing on June 10.
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Hamilton said the hotel’s scale, location and direct connection to the NZICC make it one of the most significant hotel offerings to come to the New Zealand market in recent years.
“The Grand offers an incoming purchaser a major five-star hotel property available with vacant possession in the centre of an established entertainment, events and dining hub.
"It is at the heart of the SkyCity precinct, which includes the Sky Tower, SkyCity Casino, Federal Street dining, theatres and visitor attractions, drawing around five million visitors annually. This provides a premium opportunity for a multinational brand.”
Hotels of this scale and quality are increasingly difficult to deliver economically and buyers will recognise this as a key opportunity to buy a substantial, premium hotel asset below replacement cost, Hamilton added.
The freehold property comprises 312 luxury guest rooms and suites, two hotel-operated restaurants, a business centre, gym, lap pool, spa and sauna and 83 car parks.
The complex also includes leased entertainment, hospitality and retail spaces occupied by the All Blacks Experience, Wētā Workshop Unleashed, Masu restaurant, East Day Spa and a further restaurant space to be leased by SkyCity.
These leases and the car parking provide additional value beyond the core hotel operation, said Holmes.
“The existing leases, visitor attractions and car parks broaden the asset’s income profile.
"The former Auckland Convention Centre space, which currently houses the All Blacks Experience and Wētā Workshop attractions, also gives the owner future options over a substantial floor area.”
The Grand’s direct internal access to the NZICC puts the hotel in a very strong position to capture corporate, conference and event-related demand generated by the hundreds of events the venue will host every year, with a number of major international conferences already confirmed.
Alongside completion of the NZICC, Auckland’s tourism market is set to benefit significantly from several other events and travel-related changes, Hamilton said.
“Auckland’s tourism growth is experiencing a significant boost from several factors including the loosening of restrictions on Eden Park concerts from six to 32 a year, the $70m committed by central government into event funding, the relaxation of tourist visa requirements and improving flight capacity.”
Holmes said the sale is expected to attract interest from both domestic and offshore hotel investors seeking a significant Auckland CBD presence.
“With over 300 rooms, The Grand by SkyCity provides the scale required for strong operational efficiency, which will be attractive to seasoned hotel investors looking to establish or expand their New Zealand presence.
"The wider Midtown regeneration story will also enhance the value proposition for buyers, as the completion of the City Rail Link draws closer.”
The hotel is positioned close to the new Te Waihorotiu CRL station, which is expected to become Auckland’s busiest train station.
The surrounding Midtown area is also benefiting from significant public and private sector investment, as council and local property owners gear up for the substantial increase in pedestrian volumes expected when the CRL opens.
SkyCity has also entered into a non-binding heads of agreement for the sale of a major neighbouring building, 99 Albert Street (together with investment properties on Victoria Street) following a CBRE marketing campaign.
The buyer is planning capital investment that is expected to contribute to the enhancement of the surrounding area, said Holmes.
“The combination of the NZICC, City Rail Link, Council streetscape upgrades and the significant private investment into surrounding buildings, will materially improve the amenity, accessibility and visitor experience in Midtown, with The Grand by SkyCity positioned perfectly to benefit from the area’s transformation and the strong outlook for tourism demand.”
- Supplied by CBRE
