NZ Super Fund backs $200m hotel portfolio in a bet on local tourism

The portfolio includes the Adina Auckland Britomart hotel in Auckland. Photo: NZ Super

New Zealand’s sovereign wealth fund NZ Super Fund is investing in a $201.5 million (NZ$300 million) hotel portfolio managed by local construction company Russel Group and private investor Lockwood, it announced on Monday.

“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,” the fund said.

The deal involves two joint ventures, one to own the hotel properties and the other to manage them and identify future opportunities. The NZ$42 billion ($28.2 billion) wealth fund will back both ventures but did not disclose how much it will invest or the stake(s) it will own.

NZ Super Fund’s Head of Direct Investments, Will Goodwin, said in a statement that the fund had been weighing 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,” he said.

Tourism is New Zealand’s largest export industry in terms of foreign exchange earnings and directly employs one in seven New Zealanders. Annual tourism expenditure for the year ending March 2018 was $26.2 billion (NZ$39.1 billion), an increase of 7.7 per cent 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, of which only 2,500 are projected to be built.

NZ Super has been generating double digit returns almost every year for New Zealanders and has invested over $4.03 billion (NZ$6 billion) in the country, including significant stakes in Kaingaroa Timberlands, Datacom, Kiwibank, Fidelity Life and NZ Gourmet, as well as significant investments in a range of locally listed companies.

It has been investing in diverse assets including real estate, infrastructure, consumer and technology, Recently, it announced a $115-million investment in real estate infrastructure owner and operator CIM Group’s data centre portfolio in North America.

In May, it invested $65 million in Rubicon Global, a US-based provider of technology-driven waste and recycling solutions for businesses. Last year, it picked up a 27 per cent stake in NZ Gourmet, a specialist exporter of premium quality New Zealand fresh produce, for an undisclosed amount.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.