Sky City agrees to sell Grand Hotel for NZ$221 mln
Sky City Entertainment will keep running the hotel under a management deal through June 2027 even as ownership changes hands
Published
Sky City Entertainment has signed an agreement to sell the Grand Hotel and its business assets for NZ$221 mln. The company will continue to manage and operate the hotel until June 30, 2027.
The buyer's identity was not disclosed in the agreement. When Sky City first reached a non-binding deal on the sale in July, it said the transaction required consent from the New Zealand Overseas Investment Office, which pointed to a buyer based outside the country, according to 1News. Shares in Sky City rallied 10.2% to 54 cents on July 22 after that earlier, non-binding version of the deal was announced, Capital Brief reported.
1News also reported that the hotel sale forms part of a wider asset monetisation programme Sky City announced earlier, under which proceeds are meant to go toward repaying debt and improving financial flexibility. Earlier in July, Sky City sold a 17-level office tower in central Auckland and three adjoining properties for NZ$74.5 mln to a joint venture between Mainland Capital and Russell Property Group, 1News reported.
The structure of the Grand Hotel deal lets Sky City take the NZ$221 mln onto its balance sheet as cash while keeping the income the hotel generates through the management agreement. For a casino operator that also owns hotel real estate, that shift changes the debt and liquidity picture more than it changes the underlying gaming business. The multi-year operating arrangement suggests the buyer wanted continuity rather than a clean break, limiting disruption to the hotel's revenue during the handover. What Sky City will do with the proceeds beyond the stated aim of debt reduction has not been specified, but the deal marks a move toward lighter ownership of property that sits outside its casino operations.