The NZ Superannuation Fund (NZS) is set to exit the hotel business as a joint venture local real estate portfolio valued at more than $600 million goes up for sale.
NZS partnered with the Russell Property Group and Lockwood Property Group in 2019 to form NZ Hotel Holdings, which owns seven marquee sites around the country including the Hotel Britomart, Rydges Wellington and Rotorua, and the Sofitel Queenstown.
Commercial property specialist, CBRE, is running the tender with global investors likely contenders.
Michael Simpson, CBRE Hotels Pacific managing director, said in a release that the deal was “the largest and most comprehensive portfolio of investment grade hotels ever brought to market in New Zealand”.
The now $80 billion sovereign wealth fund (SWF), which owns 80 per cent of the hotel joint venture, was unable to comment.
Meanwhile, specialist research business, Global SWF, has named NZS as the star investment performer over the past two decades.
According to a NZS release, the roughly $80 billion fund returned more than 10 per cent on an annualised basis for the 20 years to June 30 last year, a period that covers almost its entire lifespan.
“Global SWF’s annual rankings compare the performance of 13 sovereign wealth funds and 37 pension funds from 18 countries across five continents,” the statement says. “The NZ Super Fund’s returns for the 20 years to 30 June 2024 were well ahead of the average returns for both sovereign wealth funds (6.4 percent) and pension funds (6.8 percent).”
NZS tied with mammoth Swedish pension scheme, Sjunde AP-fonden (or AP7) for the 20-year best performance bragging rights.
Jo Townsend, NZS chief, said the fund had also returned well above its internal long-term performance forecasts.
“In part, that reflects how well global equities, which presently make up about 60 percent of the Fund’s assets, have performed during that time,” Townsend said. “In addition, our active investment strategies have also outperformed both our Reference Portfolio benchmark and our long-term performance expectations.”
NZS has been a regular high-achiever in the Global SWF rankings for both investment performance and sustainability metrics.
For example, the fund scored a perfect 100 per cent in the researcher’s governance, sustainability and resilience (GSR) gauge in 2024 for the second year in succession.
Introduced in 2020, the GSR rates government-owned funds on a number of qualitative features.
Anne-Maree O’Connor, NZS head of sustainable investment, told Global SWF that the fund needed to establish a “robust platform” to stay on top of technology trends and risk management with the fund set to reach $300 billion by 20250.
“We have also internalized some of the investment to teams where we thought it made commercial sense in terms of cost efficiency, although we expect to continue our partnerships with external parties and co-investors, too,” O’Connor said at the time. “In sum, it is all about building for the future, including some increase in insourcing.”
Founded by Diego López, Global SWF provides data and analysis across government-owned investment vehicles including sovereign wealth funds, pension schemes and central banks.
Public pension funds reported US$25.5 trillion under management globally as at this March, followed by central banks (US$16.8 trillion) and sovereign wealth funds (US$13.4 trillion), the researcher says.