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Eureka buys Crowne Plaza Christchurch, vendors increase casino stakes

Published 12 June 2008

Eureka Funds Management Ltd of Australia has bought the 298-room Crowne Plaza Christchurch Hotel from SkyCity Entertainment Group Ltd & Skyline Enterprises Ltd for $61.5 million in cash.

The 2 New Zealand companies held their stakes through Premier Hotels (Christchurch) Ltd.

In a related transaction, hotel manager IHG (InterContinental Hotels Group) has sold its shareholding in Premier, which also owns most of Christchurch Casinos Ltd. As a consequence of this transaction, SkyCity & Skyline will increase their shareholdings in Christchurch Casinos from 41% to 46% each. The remaining shares in Christchurch Casino are held by a private South Island-based investment company.

Both transactions remain subject to certain conditions, including Overseas Investment Office approval, which means the transactions are not expected to be confirmed until late August.

After applying part of the proceeds of the sale of the hotel to the acquisition of IHG's shareholding in Premier, a significant cash holding will remain for the shareholders of Christchurch Casino.

The hotel will be owned by the Eureka Core Property Fund 3, a wholesale property investment fund which has $750 million in property assets, including interests in the Four Seasons Hotel in Sydney & Travelodge Hotel, Wellington.

The Crowne Plaza will continue to operate under that name and will still be managed by IHG. It will become the 11th hotel in Australia & New Zealand owned by Eureka managed funds & managed by IHG, a portfolio that includes InterContinental Wellington.

Eureka fund manager Glen Boultwood said yesterday Eureka continued to be attracted to hotels as a property asset class: “Eureka’s unique mix of property & hotel experience has allowed it to take advantage of market inefficiencies to drive hotel performance.”

Want to comment? Email bobdey@propbd.co.nz.

Attribution: Company releases, story written by Bob Dey for this website.

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