26 September 2019

Augusta signs Queenstown hotel management agreement with Radisson Hotel Group

Augusta signs Queenstown hotel management agreement with Radisson Hotel Group

Augusta is pleased to announce the signing of a hotel management agreement with Radisson Hotel Group in Queenstown, following the purchase of the prime, central-Queenstown Man Street site in November 2018.

This will be the first Radisson Collection hotel in New Zealand, as well as one of two initial seed assets for the Augusta Tourism Fund.

The Radisson Collection Hotel Queenstown, located at 17-19 Man Street, is targeted to open in early 2022 as a low rise boutique luxury hotel, offering outstanding uninterrupted elevated views to the Remarkables within walking distance of the Queenstown CBD. Radisson Hotel Group is one of the world’s largest hotel groups with seven distinctive hotel brands, and more than 1,400 hotels in operation and under development around the world.

Mark Francis, Managing Director of Augusta, comments: “Queenstown is a thriving economic centre and airport passenger numbers, guest nights and annual visitor spend has continued to grow over the past five years. Ongoing sector growth is expected and our strategic collaboration with Radisson Hotel Group places us well to capitalise on this.”

The hotel management agreement is for a 15-year term, with other terms of the agreement typical of hotel agreements. The signing of the agreement further progresses the development of the Man Street site, allowing the Tourism Fund to be launched.

Tourism Fund to launch in 2020

The open-ended, unlisted Augusta Tourism Fund will allow investors a unique investment opportunity to play a part in building New Zealand’s tourism infrastructure. Alongside the Queenstown Radisson property, the fund will include a second initial seed asset, the Jucy Snooze Hotel in Auckland. The fund is expected to launch in the first quarter of the 2020 calendar year.

“Tourism is of critical importance to the New Zealand economy, having grown to become New Zealand’s largest export product, investment in infrastructure is essential in harnessing the benefits of growth. The establishment of the Augusta Tourism Fund represents Augusta’s confidence in the strong performance of the sector, as well as forecasted future growth,” comments Francis.

Francis adds: “This fund seeks to capitalise on the acute shortage of hotel accommodation being experienced across New Zealand with a focus on Auckland and Queenstown locations, where the two seed assets are located. Current and future investment will be focused on existing operating hotels, as well as hotel development opportunities where an appropriate risk-adjusted return can be achieved for investors.”

“We’re excited to be offering our investors the chance to invest directly into commercial tourism infrastructure as well as into the future of the sector in New Zealand. Our vision is to be New Zealand’s most diverse institutional-grade property funds management business across multiple sectors and the Tourism Fund is a key part of this strategy.”

New Diversified Fund to launch in November 2019

Alongside the Tourism Fund, Augusta remains focused on building strong pipelines for growth and the launch of future funds.

The company expects to launch a new Diversified Fund in November of this year with the objective of providing investors with a stable monthly income stream. The Albany Lifestyle Centre will be the seed asset for the Diversified Fund, with the Retail Fund launch now a longer-term proposition. More information will be provided to the market in the coming weeks.

Augusta is also currently the preferred partner for the Queenstown Lakeview development. This project marks the start of a strategic partnership with Australian based Ninety-Four Feet to develop at 3ha site in Queenstown over the next 7-10 years. Should negotiations with Queenstown District Council be successful, this project may provide opportunities for the Tourism Fund in the medium to long term.