| The $42 billion NZ Super Fund is investing into a $300 million hotel portfolio established by the Russell Group and Lockwood Property Group, creating a platform for further investment in New Zealand's tourism sector. The phased investment, which is subject to normal closing conditions, includes the Four Points by Sheraton and Adina Auckland Britomart in Auckland, the BreakFree Hotel in Christchurch, and an intention to acquire and develop additional sites. NZ Super Fund's Head of Direct Investments Will Goodwin says the Fund had been considering opportunities to invest in New Zealand's tourism sector. "This partnership will give the NZ Super Fund exposure to New Zealand's fast-growing tourism sector, diversify our investment portfolio and help support the industry's strategic objectives. "New Zealand needs additional hotel accommodation to support both growing domestic tourism and international arrivals. There are clear capacity constraints in this sector and we look forward to working with our partners to identify opportunities for future growth," says Mr Goodwin. Tourism is New Zealand's largest export industry in terms of foreign exchange earnings and directly employs one in seven New Zealanders. Total annual tourism expenditure for the year ending March 2018 was $39.1 billion, an increase of 7.7 percent ($2.8 billion) from the previous year.* Despite this growth, New Zealand is projected to have a significant shortfall in hotel rooms, with more than 4,500 extra beds needed by 2025. Auckland faces the biggest constraint with a requirement of up to 4,300 new hotel rooms, but only 2,500 are projected to be built.** Russell Group Managing Director Brett Russell says the Group is happy that the venture creates an opportunity for a strong New Zealand-owned portfolio within the hotel and tourism sector. "We're excited to partner with the NZ Super Fund to support development of the local tourism sector, and we're pleased that these assets remain in local ownership, he says. Lockwood Property Group's Steve Lockwood said the significant opportunity for future growth in the sector was a major motivation for the deal. "The partnership provides a unique set of skills which will enable us to capitalise on the opportunities which become available in this sector throughout metropolitan and provincial New Zealand," says Mr Lockwood. Under the arrangement, two joint ventures have been created, one to own properties operating as hotels and the other to manage properties and identify future opportunities. Announcements on future development opportunities will be made in due course. |