Singapore-listed CDL Hospitality Trust announced on 17 June that it has entered into a new lease agreement with Hospitality Services Limited for its property in Auckland, the former Rendezvous Hotel Auckland.
Hospitality Services Limited is a wholly-owned subsidiary of Millennium & Copthorne Hotels New Zealand Limited. Following the commencement of the new lease, Rendezvous Hotel Auckland will be rebranded as Grand Millennium Auckland.
The new lease will commence from 7 September 2016, for a term of 3 years as the existing lease with Rendezvous Hotels (NZ) Limited expires on 6 September. The new lease with Hospitality Services Limited provides for two renewal terms of three years each.
“Auckland, the key gateway city to New Zealand, is expected to experience strong demand growth in the hospitality sector and this combined with limited increases in supply of hotel rooms should result in a positive outlook for the sector”, said CDL Hospitality Trust in its statement on the lease.
Under the terms of the new lease, CDL Hospitality Trust will receive rent equivalent to the net operating profit of the property, subject to an annual base rent of NZD6.0 million. CDL Hospitality Trust will continue to be responsible for furniture, fixtures and equipment as well as capital expenditures of the property.
Units of CDL Hospitality Trust are currently trading at SGD1.42 on the Singapore Exchange, slightly lower from its previous close by 0.7%.