Dunedin ‘garden hotel’ changes hands in off-market agreement
One of Dunedin’s finest hotels has sold having received a compelling offmarket offer.
The Heritage Dunedin Leisure Lodge within two acres of beautifully-kept garden had been part of Skyline Enterprises’ portfolio for almost 40 years.
While it wasn’t actively on the market, JLL broker Nick Thompson was able to arrange an off-market transaction between Distinction Hotel Group and Skyline Enterprises.
Skyline Enterprises chief executive Geoff McDonald says the hotel has generated a lot of interest over the years.
But the board determined the most recent offer was too good an opportunity to turn down.
"It has always been a very solid performer, comprising less than 10 per cent of our total portfolio revenue with consistently strong returns,” says McDonald.
“The business has recovered well since the pandemic-induced lockdowns due to the fact that a significant proportion of its patronage isn’t from tourism but rather corporate travellers or parents of students in the nearby university coming to stay.
“The off-market offer we received reflects the asset’s true value, so after a brief negotiation period we went ahead with the transaction.
“This is in line with our key strategic growth areas and continued focus on offshore expansion.”
Thompson says the Heritage Dunedin Leisure Lodge joins several other hotel complexes across New Zealand in the Distinction Hotel Group’s portfolio, including the Distinction Dunedin Hotel a short drive away.
“The 77-room hotel with conference spaces and a restaurant and bar benefits from its enviable location, directly neighbouring the Dunedin Botanic Garden and within a short stroll to the Otago Museum, the University of Otago, and Forsyth Barr Stadium,” says Thompson.
“Distinction Hotels Group is 100 per cent New Zealand-owned and operated and has evolved over the past 30 years into one of New Zealand’s most recognised locally owned hotel chains.
“This off-market transaction is just one example of the many inquiries we’re receiving at the moment.
“The unwavering demand means sellers of hotel and hospitality assets in New Zealand are receiving returns akin to before the pandemic,” Thompson adds.
The sale price cannot be disclosed due to a confidentiality agreement.