NZ Super Fund partners with Russell Group and Lockwood Property Group to invest in New Zealand Tourism Assets
POSTED ON: 15 July 2019
MEDIA RELEASE - Joint Statement from NZ Super Fund, Russell Group and Lockwood Property Group
The $42 billion NZ Super Fund is investing into a $300 million hotel portfolio established by the Russell Group and Lockwood Property Group, creating a platform for further investment in New Zealand’s tourism sector.
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.
NZ Super Fund’s Head of Direct Investments Will Goodwin says the Fund had been considering 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.
“New Zealand needs additional hotel accommodation to support both growing domestic tourism and international arrivals. There are clear capacity constraints in this sector and we look forward to working with our partners to identify opportunities for future growth,” says Mr Goodwin.
Tourism is New Zealand's largest export industry in terms of foreign exchange earnings and directly employs one in seven New Zealanders.
Total annual tourism expenditure for the year ending March 2018 was $39.1 billion, an increase of 7.7 percent ($2.8 billion) 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, but only 2,500 are projected to be built.**
Russell Group Managing Director Brett Russell says the Group is happy that the venture creates an opportunity for a strong New Zealand-owned portfolio within the hotel and tourism sector.
“We’re excited to partner with the NZ Super Fund to support development of the local tourism sector, and we’re pleased that these assets remain in local ownership, he says.
Lockwood Property Group’s Steve Lockwood said the significant opportunity for future growth in the sector was a major motivation for the deal.
“The partnership provides a unique set of skills which will enable us to capitalise on the opportunities which become available in this sector throughout metropolitan and provincial New Zealand,” says Mr Lockwood.
Under the arrangement, two joint ventures have been created, one to own properties operating as hotels and the other to manage properties and identify future opportunities.
Announcements on future development opportunities will be made in due course.
* Tourism Satellite Account 2018, Statistics New Zealand
**Regional Hotel Market Analysis and Forecasting, Colliers International
Click here for a gallery of downloadable high resolution images of the Four Points Sheraton and Adina in Auckland, and the BreakFree hotel in Christchurch, plus photos of NZ Super Fund Head of Direct Investments Will Goodwin, Russell Group Managing Director Brett Russell and Lockwood Property Group’s Steve Lockwood.
About NZ Super Fund
The $42 billion NZ Super Fund is a global investment fund that was established by the New Zealand Government to help pre-fund universal superannuation. A long-term, growth-oriented investor, the Fund has returned 10% p.a. since inception in 2003, and currently has more than $6 billion invested in New Zealand, including significant stakes in Kaingaroa Timberlands, Datacom, Kiwibank, Fidelity Life and NZ Gourmet, as well as significant investment in a range of locally listed companies.
About the Russell Group of Companies
The Russell Group of Companies is one of New Zealand’s largest privately owned and operated construction and property organisations with entities including Russell Property Group (“RPG”) and Dominion Constructors.
The Group is 100% New Zealand owned and has operated successfully for over 50 years.
Through its property arm, Russell Property Group, the firm has an established track record in the development and ownership of hotels, having undertaken the conversion and construction of the Four Points by Sheraton and Adina Auckland Britomart as well as the BreakFree Christchurch. The QT Auckland is the Group’s latest project, due to open in 2020.
Dominion Constructors is one of the largest commercial construction companies in New Zealand and has been involved in building many hotels for their clients over the past 45 years.
About Lockwood Group
The Lockwood Group is a private investment group owned by Steve Lockwood, who was one of the three founders and major shareholder of the Crombie Lockwood Group, which from 1983 grew into New Zealand’s largest independent commercial insurance broking business.
The founders sold the business to Wesfarmers Limited (ASX listed company) in 2007, which then on-sold the company to Arthur J. Gallagher & Company (4th largest NYSE listed global insurance broking and risk advisory business) in 2014. Mr Lockwood continues as Managing Director of the wider Arthur J. Gallagher Australian and New Zealand businesses and is a long-standing investment partner of the Russell Group of Companies.