SkyCity strikes conditional deal to sell The Grand hotel to overseas buyer

SkyCity Entertainment Group has sold its top hotel, The Grand, between Albert St and Federal St, opposite the new Te Waihoritiu train station in Auckland.

An NZX announcement today said it needs Overseas Investment Office consent, so the unnamed buyer is from overseas.

“SkyCity Entertainment Group advises that it has entered into a non-binding heads of agreement for the sale of The Grand Hotel,” it said.

“The transaction remains subject to the negotiation and execution of binding sale and purchase documentation upon satisfactory completion of due diligence.

“Transaction completion is also expected to be conditional on consent from the New Zealand Overseas Investment Office.”

The company expects the money from the 312-room hotel in late 2026.

“The financial terms of the heads of agreement remain confidential at this stage.

“The transaction forms part of SkyCity’s previously announced asset monetisation programme. Capital proceeds received under the asset monetisation programme will be used to repay debt and provide SkyCity with greater financial flexibility to navigate current market conditions,” it said.

CBRE said in advertising the hotel is a 47,595sq m building with two restaurants, a swimming pool, gym and 83 car parks.

It has direct access to the Sky Tower, SkyCity Casino, theatres, dining, and the newly opened New Zealand International Convention Centre.

The building at 90 Federal St has a market valuation estimated by investment firm Forsyth Barr at $200m, with expected transaction values ranging between $200m and $250m, CBRE said.

SkyCity engaged CBRE to sell properties and raise money.

Last week, the company announced it had sold four Auckland office buildings, including its own headquarters.

The buyers are Christchurch’s Mainland Capital and Brett Russell’s Russell Property Group.

That deal is for $74.5 million.

Settlement is due on September 1.

At the half-year result in February, SkyCity chief executive Jason Walbridge said the company had a significant portfolio of real estate assets.

It was actively assessing monetisation options across individual assets and potential combinations.

External advisers were engaged and the company hoped to sell $200m of assets, he said.

Different assets were being examined “to look at different options we may pursue to achieve our objectives before next February”.

“We own a number of commercial buildings – the carparks and also other assets we’re considering.”

Trying to generate cash from Auckland car parks had failed by February: attempts to lease about 3000 car parks beneath its Hobson/Nelson St buildings had not resulted in any success.

“The Auckland car park concession process has not resulted in a proposal that meets SkyCity’s commercial objectives,” Walbridge’s February statement said.

That follows the botched deal with Macquarie which was meant to lease the parks under the convention centre but were not finished in time for that deal to be done.

The company’s full-year result will be announced on August 20.

Dividends to shareholders are suspended.

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.