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The 65-room, 384-bed Discovery Lodge in Queenstown was bought by New Zealand’s largest private hotel investor, Pandey Hotel Corp, part of the CP Group, in a deal brokered by Colliers International.
Colliers national director of hotels Dean Humphries said until the deal was struck, no major accommodation assets had sold since the pandemic put pressure on the country’s hospitality assets.
Discovery Lodge is located in the heart of Queenstown and is one of only a handful of freehold accommodation assets located in the town centre.
"These properties are rarely traded and characterised as strategic core assets," Mr Humphries said.
"The last sale of a major accommodation asset in the town centre was the Novotel Gardens back in October 2015, exactly five years ago."
Discovery Lodge is leased to a major budget accommodation provider at present but will be converted to a five-star boutique hotel once the lease expires.
The property is located in Shotover St. The 3200sq m building was built in 2004 and is located on a 1000sq m parcel of freehold land.
The current Auckland-based owners bought the property in mid-2015 as a passive investment with a long-term lease in place.
"With the advent of Covid and the lease now moving toward expiry, the owners were looking at a range of repositioning options," Mr Humphries said.
In late July CPG Hotels, part of the CP Group, announced the creation of its luxury boutique hotel brand, Fable Hotels and Resorts, and this property was expected to become part of the Fable portfolio.
"Despite the many challenges the wider industry is facing with Covid, there remains robust demand from a range of investors seeking prime strategic accommodation assets in our key tourism regions," Mr Humphries said.
"Most hotel investors have long-term investment objectives in the knowledge there are always cycles in the market.
"The sale price remains confidential between the parties. However, we do not believe any material discount was paid due to the current market conditions. If investors wish to secure prime strategic real estate, they need to meet the expectations of the vendors no matter where we are in the cycle."