Poet’s Cove Resort and Spa on South Pender Island has been sold to the same investors who paid $32.3 million for Harrison Hot Springs Resort and Spa near Chilliwack last year.
Poet’s Cove, which opened in 2004, went on the market last year. The resort on 14 acres was built for $30 million and includes an 85-slip marina, restaurant, spa, marine and commercial centre, and hotel rooms. No sale price was revealed.
An offer was accepted a few months ago from an undisclosed buyer.
Canadian hotels are in the midst of what analysts consider a robust market, where the share of foreign investment is relatively small but increasing. A number of local hotels have been sold or are being developed, some by firms with offshore interests.
The Pender Island property’s registered owner is Poet’s Cove Resort and Spa Ltd., of Vancouver, provincial government documents show. Company directors are Guoqing Zhang and Dongfen Zhu.
Zhang and Zhu are directors of Vancouver’s Saliance Global Holdings Co. Ltd., which has Chinese connections, and of Aldesta Hotel Group Co. Ltd., documents state. No one at Saliance’s office would comment on the sale.
Saliance’s website states that directly and through its affiliates, it has interests in sectors such as automotive parts manufacturing, high tech, energy, real estate, and resorts, sports and recreation. Aldesta owns Harrison Hotel Springs Resort, says the website, which includes links to that hotel and to Poet’s Cove. Saliance’s Shanghai SanDun Manufacturing division supplies auto parts for well-known automobile firms.
Aldesta develops “one-of-a-kind hotels and resorts that cater to a high-flying tourist celebrating the best that life has to offer,” the website says.
The Poet’s Cove sale is the most recent in the region. The 106-year-old Fairmont Empress Hotel in downtown Victoria is up for sale at an undisclosed price. Since 2007, it has been owned by Ivanhoe Cambridge, a subsidiary of Quebec’s Caisse de depot pension fund manager, which has decided to cut back on hotel holdings.
Last year, the Brentwood Bay Resort and Spa was sold for $13.9 million to Forebase International Holdings Ltd., which is listed on the Hong Kong Stock Exchange.
Another major hotel is in the works on Vancouver Island. SSS Manhao, a Chinese tourism firm, is aiming to spend $50 million on a 21-storey luxury hotel on a site near the Vancouver Island Convention Centre in Nanaimo.
B.C. is actively seeking Chinese investment. In April, the province and China signed an agreement to extend trade and investment.
In the overall hotel market, the number of buyers from China are “still relatively small but definitely emerging,” said Carrie Russell, of HVS in Vancouver, a consulting firm providing economic advice for the accommodation sector.
It has been five years since Canada received approved-destination status from China, she said. “There’s a real correlation there between tourism and capital investment.”
Chinese tourism is expected to grow about 20 per cent annually, she said.
Hotel returns in Canada are “very good” compared with hotels in China, Russell said. Plus, there is less regulation of real estate in Canada than in China, and Vancouver is considered a desirable market.
Also, financing is relatively low cost in Canada compared to some locations, Russell said.
Colliers International Hotels 2014 Canadian Hotel Investment Report said 115 sales last year resulted in nearly double the $1-billion annual average investment seen in the previous five years. Strong markets, easy access to capital, investor optimism, and demand for hotels all helped fire the hotel market, it said.
“Optimism abounds and demand for hotel properties is increasing with little signs of slowing,” the report said. Foreign investment grew in 2013 to the highest levels since 2007 to reach close to $857 million for nine hotel transactions, which included a five-hotel deal backed by U.S. and Middle Eastern investors.
Colliers predicts that sales this year will remain strong, reaching between $1.25 billion and $1.75 billion.
