Parininihi ki Waitōtara Inc (PKW), Te Atiawa Iwi Holdings LP (TAIHLP) – the commercial entity for Te Kotahitanga o Te Atiawa Trust, and Taranaki Iwi Holding LP (TIHLP) – the commercial entity for Te Kāhui o Taranaki Trust, are pleased to announce the acquisition of the Novotel New Plymouth Hobson Hotel (Novotel New Plymouth) and the business from current owner Philip Brown for a purchase price of NZ$23m, subject to earn-out targets achieved.
A new joint venture entity, Ngāmotu Hotels Limited Partnership (Ngāmotu Hotels LP), has been established to purchase and own the Novotel New Plymouth.
This is the first direct co-investment by the three entities and builds off all three, alongside other iwi in Taranaki, recently investing in Te Puia Tāpapa, the Māori investment fund which was established to co-invest with the NZ Superfund in large NZ investment opportunities.
Novotel New Plymouth, situated on the south west corner of Hobson and Leach Streets, is a high quality 4.5 star, 85 room, full service hotel operating under the Novotel franchised Accor Hotels Group. It is one of the newest hotels in New Plymouth built in 2015 with a 100% NBS (new building standards) seismic assessment rating.
Since opening in 2015, Novotel New Plymouth has been in rapid trade-up phase and is well positioned to build on its strong performance to date. Ngāmotu Hotels LP is pleased to confirm that Philip has agreed to continue in a management capacity following the purchase ensuring a seamless transition. In addition, all Novotel New Plymouth staff have been offered a transfer of employment to the new entity under their existing terms and conditions. Accor have confirmed their strong support of the Novotel New Plymouth, which they consider an excellent hotel with strong future potential. Essentially it will be ‘business as usual’.
Gillian Millar, Senior Vice President Operations for Accor Hotels says;
“We look forward to continuing the successful partnership with the new owners. Novotel New Plymouth is a key property within our New Zealand network”.
Philip Brown who is a director of Hobson Hotel Property Holdings Limited says the decision to sell the hotel assets came a lot earlier than he had expected and the transaction was completed off market.
“In discussions with various parties it became evident that the appetite for hotel investments was very strong and I liked the idea that the new consortium would retain ownership of the hotel assets locally. It is a very high performing hotel off the back of the Novotel brand, part of the world-wide Accor Hotels Group. It has performed above all expectations and I will be forever grateful to all the dedicated and passionate staff who have shared the journey so far in creating this beautiful hotel.”
Parininihi ki Waitōtara CEO Warwick Tauwhare-George says that the investment in the Novotel New Plymouth is exciting for PKW.
“Our involvement in Ngāmotu Hotels LP is an exciting investment for the PKW Group, in particular the ability to demonstrate kaitiakitanga over our shareholders’ interests through the diversification of our asset portfolio, embedding our belief in whanaungatanga and kotahitanga by co-investing with iwi of Taranaki and ensuring manaakitanga by targeting high performing investments to enable re-investment into our core business outcomes,” he said.
Te Kotahitanga o Te Atiawa Chairperson Liana Poutu says that the local investment aligns with the kaupapa and strategic objectives of Te Atiawa.
“We are pleased to be able to co-invest with PKW and Taranaki Iwi in the purchase of the Novotel in our tribal rohe. The collaboration gives expression to our values of partnership and co-investment with our whanaunga.”
“This also represents the first of our direct local investments as an iwi and aligns with our strategic objective to provide a foundation for future growth and Te Atiawa participation in the sector,” she said.
Te Kāhui o Taranaki Chairperson Leanne Horo says that co-investment in assets across Taranaki is good for the Trust.
“We’re glad to be involved in the purchase of the Novotel New Plymouth alongside Parininihi ki Waitōtara and Te Kotahitanga o Te Atiawa.”
“We’re excited about the possibilities of co-investing in strategic assets across the Taranaki region with partners who share similar principles and vision with Te Kāhui o Taranaki,” she said.
The outlook for the hotel sector in Taranaki, and New Plymouth in particular, is positive. Since 2015, Taranaki has experienced strong visitor growth which, for the 12 months to July 2018, reached 1.1 million, equating to just over 2.1 million guest nights. This visitor growth translated into a 14% increase in visitor spend to $400m for the year ending July 2018 over the prior year placing Taranaki the 9th largest region in NZ by visitor spend with the 2nd largest year on year growth rate.
The Taranaki Regional Economic Development Strategy ‘Taranaki Visitor Sector – Action Plan’ forecasts a compound annual visitor growth of circa 7.5% over the next 7 years increasing annual visitor numbers from the current 1.1 million to circa 1.8 million with visitor spend increasing from $400m to circa $600m. In addition to the sound establishment of the hotel by Philip and Helen, the outlook metrics underpin the investment by Ngāmotu Hotels LP. The operating business of the Novotel New Plymouth is expected to deliver enduring excellent customer service.
PKW, TAIHLP and TIHLP are excited by this investment into the accommodation and wider tourism sector. It will provide not only strong annual earnings and diversification across their wider investment portfolios, but also increases the combined investment footprint in Taranaki and the ability to contribute to driving the growth of tourism and business activity in the region.
Ngāmotu Hotels LP will take ownership of the Novotel New Plymouth on 1 January 2019.