MCK - Millennium & Copthorne Hotels NZ Limited

[Basil]

SkyCity rose 7.5c or 12.82% to 66c after announcing it has a conditional agreement for the sale of The Grand Hotel in Auckland. The deal needs the consent of the Overseas Investment Office, and SkyCity is expecting settlement late this year.

It's understood the price for the hotel sale is in the vicinity of $250m, which would reduce SkyCity's net debt of $594m by nearly half. Real estate agents are indicating there's a strong appetite for New Zealand hotel assets.

Market close commentary  - anything an unnamed real estate agent states should be taken with a grain of salt however.....

Unless it pertains to Queenstown Hotels where the sky's the limit !

[Crackity]

Unless it pertains to Queenstown Hotels where the sky's the limit !

The total freehold approximate land area for the key Millennium & Copthorne Hotels (MCK) Queenstown portfolio properties is 281,605 square feet (approx. 26,162 square metres or 2.62 hectares). [1]



Footprint SummaryCopthorne Hotel & Resort Queenstown

Lakefront

4-star hotelApproximate Site Area: 18,709 square metres (1.87 hectares / 201,382 square feet)Location: Corner of Adelaide Street & Frankton Road, Queenstown 9300Strategic Feature: Directly borders the lakeside zone, capturing a massive physical footprint running up the slope from Frankton Road.

Millennium Hotel Queenstown

4-star hotelApproximate Site Area: 7,453 square metres (0.75 hectares / 80,223 square feet)Location: 32 Frankton Road (Corner of Stanley Street), Queenstown 9300Strategic Feature: Placed at a primary town-entrance intersection, positioning its under-structure parking and multi-level resort framing right against the central business district boundary.


Sounds valuable 🤭

[Basil]

Sounds valuable 🤭

Its so nice down there, I love it.  I was born in Southland and feel a real connection to Queenstown as we used to holiday there as kids.  Dad encouraged us to climb Ben Lomand mountain above Bob's Peak where the gondola's upper base is situated and it was exhausting but a lot of fun.  The Queenstown region is just as beautiful and pristine as it was back then...the lake is still very clear.  It must surely be one of the most beautiful places on earth.  Unfortunately everyone wants a piece of it these days and its so busy !!

Gosh that's a lot of lakefront and town front land.

[seaweed]

Its so nice down there, I love it.  I was born in Southland and feel a real connection to Queenstown as we used to holiday there as kids.  Dad encouraged us to climb Ben Lomand mountain above Bob's Peak where the gondola's upper base is situated and it was exhausting but a lot of fun.  The Queenstown region is just as beautiful and pristine as it was back then...the lake is still very clear.  It must surely be one of the most beautiful places on earth.  Unfortunately everyone wants a piece of it these days and its so busy !!

Gosh that's a lot of lakefront and town front land.

Wow, that brings back memories in the late 70s when working at Alexandra. We all jumped into the Kombi or my mates 69 Falcon ute on our days off and shoot across to QT for some fun. The Mountaineer and Eichardt's Hotel were some of the favourite stops and the odd free ride up the gondola which one of my mates used to run. 

[Southern Lad]

CDL Singapore released its half year results this morning:

https://www.cdl.com.sg/newsroom/cdl-posts-revenue-of-s-2-7-billion-and-triples-patmi-to-s-301-6-million-for-1h-2026

[Basil]

Gosh those are incredibly strong results.   Also a very strong result for MCK for the half year.
Taking over MCK would be just like half emptying the petty cash office tin for them.

[Crackity]

our priorities remain focused on strengthening portfolio quality, enhancing earnings visibility and pursuing capital recycling initiatives. The outcome of our strategic review exercise remains on track to be announced by end-September 2026 and will clearly articulate the future strategic direction, capital allocation framework and implementation roadmap for our next phase of value creation."

[Southern Lad]

Good opinion piece by Eden Bradfield on BusinessDesk this morning "Millennium and Asset Plus, a tale of two discounted stocks". 

Here's the link (paywalled) - https://businessdesk.co.nz/article/opinion/millennium-and-asset-plus-a-tale-of-two-discounted-stocks

He suggests the quality of MCK's assets is far superior to APL's and his pick of an eventual (who knows when) CDL takeover at $4.20.  He goes into detail on ACC's blocking stake and king maker role in MCK.

[Crackity]

https://ir.cdl.com.sg/static-files/f3c3812d-7f74-4af4-8707-dc936337a80c

The overlords strategic review is out

[Southern Lad]

Paul McBeath in this morning's The Bottom Line newsletter is speculating that neither MCK nor CDI appear to fit comfortably in CDL's refreshed strategy.  He speculates that CDI could be merged into Fletcher Residential and Winton (presumably under new ownership) and that MCK doesn't appear to fit the hotel strategy of focusing on large hotels in gateway cities, and could be mopped up as a precursor to an exit.

Clearly both MCK and CDI are small fish in the CDL pond, so possibly a lower priority in the short term.

[Basil]

Seems to be a real focus on their home market in Singapore where they feel they have a competitive advantage.
I didn't see anything in their strategic review that would give cause for optimism for NZ assets.  The endless malaise in the property market is not helpful to CDI.
I still think their focus for the foreseeable future will be with risk management in the Middle East.  Lots of patience required.  Long periods of patience with ultra low dividend yield is not something I am very good at.

[Stoploss]

" required.  Long periods of patience with ultra low dividend yield is not something I am very good at."
   Maybe try some barking .

[Basil]

I had a good go at them at the annual meeting, afterwards in discussions and followed that up with a letter to the board. You can lead a horse to water but you can't make it drink. I think their focus will be on risk management in the middle east for quite some time.

I've gradually lost patience and confidence in the board as the year has gone on and have been steadily selling small amounts for several months and am now out. Good luck to holders.