16 Aug 2022
Words Staff Writers HM Magazine

Across The Tasman

RESORTBROKERS

Ian Crooks, Founder and Chairman

Since April 1 - the start of the NZ financial year – enquiries in both commercial and residential property has dissipated.

Motel leases are just not getting any traction with the banks. There are no formulas around the buying and selling of leases.

Here in Australia, when we are setting up a new lease, we look at the P&L statements to determine the net profile, and rent should be no greater than 45 per cent with the remaining 55 per cent going to the operator.

We price that 55 per cent at between 30 and 35 per cent which creates the selling price depending on the location. That’s been working for us for over 37 years since we introduced it to the Australian market.

In New Zealand they don’t have a formula like that.

Large Australian groups have shown interest in camping or holiday parks in New Zealand but believes the sector poses some challenges.

Camping or holiday parks don’t generate enough money, there are not a year-round business like they are in Australia because of the weather.

Queenstown is still a hot market due to its hotels and resorts.  It’s one of the few year-round destinations because you’ve got summer and winter, but a shortage of flights has created a problem.

Taupo is another destination like that because it is strategically placed right in the North Island and State Highway 1 – which runs the length of both islands - through it. It’s now got about 60 motels and very nice resorts and they are enjoying good occupancies with a lot of retirees travelling.

Destinations, such as Auckland and Wellington, however, are struggling due to a lack of events.

New Zealanders are more conservative than Australians. The cost of living there is much higher and real wages are much lower.

It would take a lowering of interest rates, more events and no COVID to create more confidence.

Despite all of this, New Zealand remains a popular place to visit.