YHA Lake Tekapo - one of the 10 properties and operations just sold. Photo / supplied
YHA Lake Tekapo - one of the 10 properties and operations just sold. Photo / supplied
Ten Youth Hostel Association (YHA) properties in the popular national chain have been sold mainly to offshore interests and will soon reopen under new management.
Ian Lothian, national chair of YHA New Zealand, announced the sales, with nine of 10 going to an as-yet-unnamed foreign buyer for a price notdisclosed and one YHA going to a local buyer.
The Herald previously reported a potential price of $60m on the chain but no price is available on the deal yet.
All 10 hostels just sold are now closed and are expected to reopen soon with new management, but a further 17 separately-owned YHAs are continuing to operate.
"We can now advise members and partners that our four remaining properties - YHA Auckland International, YHA Aoraki Mt Cook, YHA Queenstown Lakefront and YHA Franz Josef - have been sold," Lothian wrote to network partners, members and other parties associated with the business at the end of last month.
"The four other properties previously sold to RPZ - YHA Rotorua, YHA Wellington, YHA Lake Tekapo, and YHA Wānaka - have also been on-sold to the same purchaser," he wrote on September 30.
The other two to make up the 10 are YHA Te Anau which has sold to a local investor and YHA Christchurch which was a reassignment of that business.
Overseas Investment Office clearance is not understood to be needed. Some of the properties would be classified as "sensitive" under the law because they are near water like lakes so for any land sale to go ahead, approval would be needed under the Overseas Investment Act.
But one source said sensitive land was not being sold.
"OIA approval wasn't needed and the deals have all settled. The only hostels possibly located on sensitive land were leasehold tenure, so the land remains with owners, like in the case of YHA Aoraki Mt Cook with the Department of Conservation and the same with the Queenstown YHA," the source said.
YHA Aoraki Mount Cook is one of the 10 just sold. Photo / supplied
Lothian said: "YHA New Zealand is delighted that the purchaser is a hospitality group focused on providing quality budget accommodation. We appreciate that you may have questions regarding who has purchased the properties. Once they have made public their purchase, then we will be able to talk about that more freely."
"These sales have ensured that all YHA New Zealand's liabilities are now cleared, which is a hugely positive outcome for the organisation. We extend our warmest thanks to all our trade and supply partners who stood by us during this time," he wrote.
The sales were completed by Colliers' Dean Humphries, Hamish Doig and Barry Robertson.
The chain was founded in 1932.
"We are effectively in a position to become a 90-year-old business start-up, which must be some kind of record," Lothian wrote.
The sales path had not been a linear journey but meant that the national board could now develop proposals for the future direction of YHA and looked forward to discussing these with members, he said.
YHA Franz Josef is included in the 10 sold. Photo / supplied
In February, the Herald reported that nine YHA properties were reported to be up for sale, but in the end 10 of them sold because a Christchurch YHA was included in the sale deal just announced.
Lothian's latest communication stressed that the YHA brand was still operational via its associate network of 17 hotels which continued to welcome guests.
Earlier this year, Colliers' Hamish Doig said buyers of the YHAs put up for sale were showing strong interest.
"Overseas buyers know the calibre of these facilities and see it as a great opportunity," he said in February. The YHA properties garnered interest because of their geographic spread.
Private investor RPZ bought four properties last year as a long-term passive investment, he said. But it was also seeking to sell those properties. It wanted to partner with YHA but doesn't usually invest in hospitality, Doig said.
So Colliers were acting for two clients: RPZ and YHA.
RPZ had decided to market its four YHAs with the association's other six properties to achieve a critical spread of real estate and hospitality operations for buyers.
The YHA sales follow the $170m unconditional sale of Auckland's Stamford Plaza, also announced this week.
The hotel is being sold to a newly-formed company Albert Street Hotel. That is owned by a consortium which is national hotel owner CP Group, Alvarium Investments and Archipelago Capital.
The transaction went unconditional this week and is due to settle in December.
The vendor is Singapore's Stamford business and the stock exchange in that country has issued a notice about the sale.
