The land and buildings associated with Napier's first 5-star international branded hotel are for sale, with opportunities for investors to run with the existing hotel management agreement (HMA) in place, or to acquire with vacant possession to rebrand and reposition.
Located on the prominent corner of Munroe and Raffles Streets in the Napier CBD, the Art Deco-influenced modern hotel offers 52 premium rooms managed by Swiss-Belhotel International under an HMA for a 10-year term.
Built as an office tower with ground floor commercial tenancies and 29 basement carparks in 2015, and largely occupied by PwC until their relocation in 2018, the four-level building was converted to hotel use, opening its doors in 2021 as Swiss-Belboutique Napier.
The conversion to upmarket hotel included development of on-site amenities including Saffron Social Kitchen restaurant, in-house gymnasium/fitness centre, and guest laundry.
There are three commercial tenancies with a total 500sqm footprint at street level, two of which are leased to office occupiers returning current gross passing income of $83,309 per annum, with the third space of 200sqm currently vacant.
Swiss-Belhotel International has an initial 10-year HMA in place on the Napier facility from 26 June 2020, and an extension term of a further 10-year HMA.
The current agreement has a Termination on Sale clause in it which, if exercised by the vendor, means the property can be acquired by a new owner with vacant possession if desired.
36 Munroe Street, Napier South is for sale by tender via Bayleys Auckland Central, closing 4pm Thursday 16th November (unless sold prior).
Wayne Keene, Bayleys’ national director hotels, tourism and leisure says hotel stock is tightly-held in New Zealand and the Napier opportunity is underpinned by an international tenant covenant that is well-placed to capitalise on a captive domestic and growing international tourism market.
“Headquartered in Hong Kong, Swiss-Belhotel International is recognised as one of the fastest-growing hotel management groups globally, and has more than 125 hotels, resorts and projects spanning 19 countries.
“In addition to Swiss-Belboutique Napier, it manages Swiss-Belresort Coronet Peak and Swiss-Belsuites Pounamu in Queenstown, plus Swiss-Belsuites Victoria Park, Auckland.
“Tourism is the third-biggest earner for the Hawke's Bay economy behind agriculture and manufacturing, and with a strong uptick in electronic card transactions throughout the region recently, plus solid hotel occupancy levels, Swiss-Belboutique is well positioned for the looming summer season.”
The region has several big-draw events including the Mission Concert, Art Deco Festival, FAWC Food and Wine Classic, along with an acclaimed wine trail and other recreational attractions.
“The Hawke’s Bay region was recently named one of the world’s Great Wine Capitals – and the only one in New Zealand – joining an elite global network,” says Keene.
“Being just a one-hour flight from Auckland, and with a busy regional airport servicing most parts of the country, Napier is accessible to both a large pool of domestic travellers and incoming overseas visitors looking to explore the regions.”
Hawke's Bay's tourism expenditure increased by 7.18% in the 12 months to July 2023 despite subdued summer trade given Cyclone Gabrielle’s impact, and a proactive tourism marketing body promotes the region widely.
With limited competition in the upper end of the accommodation market in the region, Swiss-Belboutique Napier has a competitive edge, says Keene.
“There’s further income potential for a new owner who retains the current HMA through optimised room and occupancy rates. Alternatively, a change in management agreement could be explored, while leasing up the vacant ground floor commercial tenancy would boost rental income.”
“Monroe St is one of Napier's busiest arterial routes carrying high volumes of traffic in and out of the city centre and the hotel has good profile to two road frontages.
“The offering could appeal to a local buyer wanting to add a trophy asset to a portfolio, or an out-of-town investor or a forward-thinking owner-occupier that sees value in the growing Hawke’s Bay tourism market.”