Colliers: Good start for hotel investment with $250m sold in Q1

22nd April 2025 By Paul Yandall | paul@propertyticker.co.nz | @propertyticker

Hotel deals have started strongly this year with around $250m in value changing hands, although one of those was for the record price of $180m.

Colliers’ New Zealand Hotel Market Snapshot for March 2025 showed the $250m seen in Q1 was more than the sum total of that seen in both 2023 and 2024 full years and almost as much as all of 2022. It was about 60% of the record circa $430m seen in hotel deals for the whole of 2021.

“The year has started well with the $180m purchase [from Precinct Properties] of the Auckland InterContinental hotel by Singapore-based Hotel Properties Limited at over $1m per key, a record price for a New Zealand hotel,” stated Colliers’ report, authored by hotel advisory and valuation director Chris Bennett and hotel brokerage and advisory director Derrek Anderson.

“This hotel sale reflects strong confidence in the long-term prospects of the New Zealand market.”

Other sales completed in Q1 included the $31.9m purchase by Millennium & Copthorne Hotels New Zealand Limited of The Mayfair Hotel Christchurch from Mayfair Luxury Hotels Limited and the Stapley family, and Prime Property’s acquisition of Waipuna Hotel & Conference Centre in Mt Wellington, Auckland, which was reportedly on the market for around $44m.

“A key variable influencing hotel asset values is the cost of capital,” Anderson said. 

“As the Official Cash Rate continues to drop [from 5.5% to 3.5% over the past 12 months] in New Zealand we expect that will boost transaction numbers, despite the backdrop of geopolitical uncertainty that investors are currently navigating.

“The recent sale of the InterContinental Auckland to an offshore purchaser underscores the long-term prospects of the New Zealand market as we move forward in our economic recovery.”

Despite some market uncertainty in the short-term due to international trade risks, Colliers said it expected transaction levels to increase in 2025.

The agent added that the performance so far this year of the country’s major hotel markets continued the trend from 2024, “with Rotorua, Christchurch, and Queenstown performing well, while Auckland and Wellington face more challenging conditions”.

Using information from Hotel Data New Zealand, both Auckland and Wellington saw revenue per available room drop by 10% the year to 31 March 2025.

“In Auckland there is an increased supply of hotel rooms that has impacted the numbers, while the city would benefit from a greater number of major events,” Anderson said.

“We have seen concerts at Eden Park and the SailGP racing lead to strong demand, indicating the potential that could be unlocked for the city with a comprehensive programme of future events.

“Next year’s opening of the New Zealand International Convention Centre looks promising for the city and projections from the NZICC suggest the facility will attract 33,000 new international visitors to New Zealand, which equates to 101,000 additional visitor nights.”

While occupancy and average daily rates were down in Wellington due to the central government’s reduction in spending, Anderson said he did not see that as a long-term shift and expected demand to bounce back in line with the broader New Zealand economy.

Colliers noted that Queenstown remained the “standout performer”, with international tourism driving RevPAR up by 6.5% to $239 for the year ending 31 March 2025. Queenstown hit a record average daily rate on 31 December 2024 of $673.

Colliers’ New Zealand Hotel Market Snapshot for March 2025 can be read here.