Australian development financier MaxCap Group said yesterday it would provide $30 million of first mortgage funding to developer & builder Safari Group Ltd for the new Ramada hotel & apartment building in central Wellington.
It’s the first New Zealand project to be financed through MaxCap’s First Mortgage Construction Fund, an Australian-based open-ended fund for wholesale investors established in 2018 to finance development projects.
Melbourne-based commercial real estate lender & investment manager MaxCap set up a local subsidiary, Maxcap NZ Ltd, 2 years ago in a joint venture with Bayley Corp Ltd & Forsyth Barr Group Ltd, which hold 25% each.
Safari will use the development finance to deliver the Ramada Wellington mixed-use project on the corner of Vivian & Taranaki Sts. It will comprise 72 hotel units with associated hotel facilities, 30 apartments, 14 visitor accommodation units, ground floor commercial & 29 parking spaces.
Safari Group director Rob Neil said Ramada Wellington, in line with Safari Group’s recent projects, would provide a mix of residential accommodation targeting owner-occupiers and strata-titled hotel accommodation.
“It is suited to investors seeking a hands-off investment providing returns at higher levels than most standard residential property investments. Purchasers of the hotel units will receive a fixed rental income guaranteed by Marsden Group Ltd, a well regarded NZ-based hotel operator. In addition, Marsden will operate the hotel under the Ramada brand, which is part of the Wyndham international resort & hotel group.”
MaxCap NZ chief investment officer Mark Farrands said: “We are delighted to be funding this development, reinforcing our commitment to providing institutional-scale credit to the real estate sector in New Zealand. Safari Group is a highly regarded developer with strong relationships across the property & construction sectors.
“Safari has derisked the project by partnering with proven operators in Marsden Group and creating a mix of product that we expect will perform well despite the current economic headwinds.”
Mr Farrands said that, despite the lack of international visitors & obvious challenges the New Zealand tourism sector is facing, the Wellington market had proven more resilient than most. He said the project, which is in the early stages of development, had attracted a good level of pre-sales which had continued through the various Covid-19 alert levels.
“At this stage of the project, Safari Construction Ltd (a subsidiary of Safari Group) currently has more than 100 workers on site and this number is growing as more facets of the project are being opened up, providing a boost to the local economy and supporting local trades.”
23 August 2019: Melbourne specialist property funder joins Bayleys & Forsyth Barr in NZ venture
Attribution: MaxCap release.