5 star investment and development opportunity at The Langham Auckland
5 star investment and development opportunity at The Langham Auckland
27 February 2016
Auckland, 27 February 2016 - As international tourism to New Zealand through Auckland reaches record levels, the second largest hotel in New Zealand, the five star The Langham Auckland at 77-83 Symonds Street, has come onto the market for sale in one of Auckland’s strongest real estate opportunities in years.
Marketed by Warren Hutt, Peter Hamilton and Rob Cross of exclusive agent CBRE Hotels, The Langham Auckland is for sale by way of an International Expressions of Interest campaign, with a closing date of 12 April 2016.
Warren Hutt, Senior Director CBRE New Zealand, says that this is a landmark opportunity.
“The Langham Auckland is a significantly attractive property asset for a number of key reasons. Firstly, it is a superb, large five star hotel in a market that has very few of them. Secondly, it is sits at the gateway into a booming tourist market. Thirdly, very few five star New Zealand hotels are offered to the market, and hotels of this size, quality and location come to the market only on a decade by decade basis, if ever. And, finally, it occupies an under-utilised site, so development potential also exists.
“Not only is The Langham Auckland the second largest hotel in New Zealand with 411 rooms, operated by the Langham Hospitality Group, but it’s conference facilities are also among the very best in the country.
“When you also consider that Auckland is the strongest performing hotel market in New Zealand, with considerable future scope and potential as tourist numbers skyrocket, it is understandable that we are already seeing unprecedented interest in this prestigious and internationally recognised five star hotel. It is poised to capitalise on the city’s rapidly growing demand for hotel accommodation.”
Hutt adds that because this is the first time in almost five years that a five star hotel has come on the market for sale, investors within New Zealand and overseas appreciate the opportunity to acquire a significant asset in a strong, buoyant and growing hotel and investment market.
“With very few five star hotels in Auckland, limited new supply coming through, and hardly any five star hotels offered to the market over the last decade, The Langham Auckland represents huge long-term investment potential.”
“What we are offering is an exclusive opportunity to acquire one of New Zealand’s very top hotel assets, a well-performing business in one of the most attractive investment locations in the world.
“Moreover, the large 1.3 hectare freehold land parcel offers great development potential, to further develop approximately 29,000 sqm of Gross Floor Area across the site with additional accommodation, residential apartments or car parks.“
Cross says that the combined hotel and future development opportunity is likely to be of interest to local and offshore high net worth individuals, large private organisations and institutional investors.
“We’re undertaking an investor roadshow across Asia, where we expect to see strong interest from potential buyers in Hong Kong, Singapore and China in particular. The Langham Hospitality Group is a wholly-owned subsidiary of one of Hong Kong’s leading property and hotel companies, Great Eagle Holdings, so there’s already a strong Asia-Pacific connection that we know will be of interest to the market.
“This will be a fiercely competitive process, as investors understand the value of the hotel and future development opportunity on offer, so we’re actively engaging with our clients and the wider international market.”
Sitting on 13,192sq m of freehold land in Auckland’s booming CBD, The Langham Auckland is the second largest hotel in the country.
It offers 411 guest rooms as well as some of the city’s top conference, meeting and event facilities.
With three dining, café and bar offerings that include the renowned Eight Restaurant, The Langham Auckland also has the award-winning Chuan Spa and a fully equipped fitness centre and rooftop pool on site which attract both guests and non-staying customers.
Winner of numerous awards and accolades every year, The Langham Auckland was most recently awarded the title of Luxury Classic Hotel of the Year at 2015’s Luxury Travel Guide Global Awards, in addition to Trip Advisor recognition in the form of its Traveller’s Choice Award in 2015.
Peter Hamilton, Director of Hotels for CBRE New Zealand, says The Langham Auckland’s scale is matched only by its quality.
“Originally built in 1983, this stunning European-style property comprises the main hotel building and a large 208 space car park. Anyone who has stayed at The Langham Auckland will attest to the opulent nature of the building and its interiors, from the elegant lobby to the dazzling chandeliers that line the high ceilings, and the glamourous touches in every room and facility. To stay at The Langham Auckland is to experience true five star accommodation in every way possible.
“With some of the largest conference and event facilities Auckland has to offer, The Langham Auckland features 13 adaptable venues on site including two opulent ballrooms, and the capacity for up 1,400 delegates. These facilities were recently refurbished and extended , solidifying their standing as some of Auckland’s most sought-after venues for corporate conferences, balls, banquets, expos and weddings.”
Hamilton says the hotel will continue to be managed by the internationally acclaimed Langham Hospitality Group and operated under the Langham hotel brand, which gives interested parties added confidence that the property will continue its strong performance after the sale is completed.
“The Langham Auckland trades extremely well, with strong revenue growth and improving profit conversions in recent years. In 2015 the hotel achieved high occupancy rates and management are budgeting a similar rate in 2016, as well as an increase in room rates and revenue as the market continues to improve.
He adds that The Langham Auckland is poised to further capitalise on Auckland’s rapidly growing accommodation demand with limited new hotel supply on the horizon.
“In the broader context, New Zealand’s hospitality sector is benefiting greatly from the strength of the domestic economy, currently one of the strongest in the world, together with substantial growth in inbound tourism numbers. All the market conditions are lined up to make this exceptional opportunity one for the history books.”
Furthermore, he says that with four road frontages in a key part of town, a recent independent master plan analysis has identified the potential for apartment developments on the site, and also the potential development of the car park building.
“The potential to develop apartments on the site is well-timed, as there is currently a shortage of apartment development sites in the CBD. As the city’s population continues to grow, and pressures on housing remain in place, we’re seeing incredibly strong demand for apartments.”
The Langham Auckland sits in a prime position towards the southern end of the Auckland CBD, with frontages to Symonds Street, City Road, Liverpool Street and Karangahape Road.
Rob Cross, Senior Director with CBRE Hotels Australia, New Zealand and the Pacific, says The Langham Auckland sits in a landmark spot on an elevated ridge-top site, offering city and harbour views from a number of guest rooms.
“With numerous options for hospitality and recreation on site, guests can also step outside the hotel and walk straight to the many attractions this lively city has to offer.
“The Langham Auckland also benefits from excellent nearby amenities. As the gateway to New Zealand, Auckland is going through a period of exciting urban revitalisation and as a result, there are countless shopping, dining, arts and entertainment, and leisure attractions located all over the city. Ideally situated near the top of bustling Queen Street - Auckland's main street - The Langham Auckland is in the middle of everything this world-class city has to offer.”
Hutt says that as international tourism to New Zealand is at record levels, 2016 is an ideal time to purchase an Auckland hotel.
“Last year, a record three million visitors came to New Zealand, and 70% of those visitors arrived into Auckland.
“Not only does the city now have rapidly increasing numbers of flight connections, but Auckland International Airport is also undertaking major developments which will include a $180m investment to accommodate for the predicted 40 million annual passengers the airport anticipates by 2044. Those infrastructure developments and continued growth in the tourism sector means that visitor numbers are set to continue their upwards trajectory in the coming years.”
Cross says that Auckland therefore has the strongest performing hotel market in New Zealand, with occupancy levels showing significant growth in recent years. Recent studies put international visitors’ average stays in CBD commercial accommodation at 2.1 nights, and Auckland Council is aiming for even longer stays by 2020.
“The strong growth we’ve seen in hotel occupancy is largely the result of increased demand coupled with limited new supply. The five star sector is also experiencing strong growth, with the average daily rate for 2015 up 13% on 2014 levels. More importantly, the revenue per room for the five star sector shot up by 15% in 2015 from the previous year, and New Zealand hotels as a whole saw an increase of 16% in gross operating profit (GOP) per available room in the same period. Look at the figures for yourself, and you will see that the hotel sector is the darling of the New Zealand property sector.”
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.