SkyCity Entertainment Group's ambitions for a new five-star south hotel took a step forward today when it won approval to buy a site in Queenstown.
The Office of Overseas Investment has granted consent for the company, 46 percent Australian owned, to buy a 1.01 ha site at 633 Frankton Rd.
• The large purchase of SkyCity land in Queenstown: official authorization requested by the state agency – presentation for investors
"The applicant intends to use the land to develop a five-star hotel that will complement its existing entertainment facilities in Queenstown and help attract international visitors," said OIO.
SkyCity operates a casino in Queenstown on Beach St and has SkyCity Queenstown and SkyCity Wharf.
But for a long time he planned a big expansion in the tourist mecca and the approval of today means that now he can progress.
SkyCity has given its consent to buy the land in New Zealand's Passion Cove for $ 16 million. The earth is classified as sensitive, hence the application.
Last month, SkyCity told investors in Sydney that they requested authorization from the office to buy land in Queenstown for a major new development.
"The ground was acquired for the future hotel development in Queenstown: the OIO request is being reviewed," said the presentation to the Macquarie investment conference, published in the NZX.
SkyCity did not provide any specific site, area or address last month.
But the Herald said in May that the site was most likely located on the lakefront at 633 Frankton Rd, between the airport and the resort center.
At the annual SkyCity AGM meeting in October, executive director Graeme Stephens said the company was looking to "do more" in Queenstown, particularly to serve international business.
"We think you need one [hotel]," Stephens said.
The business has extended its lease in its casino in Queenstown for three years. The lease was due to be renewed this year, SkyCity said.
SkyCity said its operations in Queenstown had led to an 18 percent increase in international business during the last six-month period, "highlighting the attractiveness of the location for premium / VIP customers."
That showed the potential of the business to take greater advantage of large customers.
Total revenue from Queenstown operations was $ 6.5 million in the first half of fiscal year 2019, SkyCity said, compared to the previous $ 6.4 million. SkyCity obtained $ 3.3 million from the gaming machines in Queenstown, $ 2.4 million from the tables and $ 800,000 from non-gambling revenue, he reported.
SkyCity shares in the NZX are trading around $ 3.72 today.