New Zealand Law Society - Overseas investor ordered to sell NZ property

Overseas investor ordered to sell NZ property

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The Overseas Investment Office says it has ordered foreign company Kingstown Blue Spring Resort (KBSR) to sell the Okoroire Hot Springs Hotel near Tirau after KBSR failed to follow through with an agreed redevelopment.

OIO Group Manager Vanessa Horne says KBSR's purchase of the hotel was approved in July 2014.

She says the company needed consent under the Overseas Investment Act to purchase the property because of the size and location of the land, and its historic value. The hotel is one of New Zealand's oldest, first opening in 1889.

“As part of the OIO consent, KBSR agreed to undertake work to improve the facility. This included protecting important heritage features and improving public access to the property," Ms Horne says.

“KBSR also said it would construct eight new hot pools and 22 new guest rooms, which would have increased the number of guests that could stay and was intended to make it more attractive for visitors and tourists. This was one of the main reasons why the application was approved."

The OIO says it became concerned about KBSR's ability to complete the developments in time and comply with its consent conditions. KBSR undertook some minor work. The OIO visited the property and worked with KBSR to try to resolve its concerns.

“KBSR has made very little progress towards completing the required developments and the OIO has decided the company is in breach of its consent conditions," Ms Horne says.

“The OIO has declined an application from KBSR to change its consent conditions. KBSR did not adequately address our concerns or give us confidence they would be able to complete the developments in the future. KBSR has been ordered to dispose of the Okoroire Hot Springs Hotel.”

Kingstown Blue Spring Resort Ltd

Information from the initial approval by the OIO shows Kingstown Volcano Springs Ltd was granted consent on 23 July 2014. It says the company is 100% owned by the People's Republic of China.

The Companies Register shows that Kingstown Volcano Springs Ltd changed its name to Kingstown Blue Spring Resort Ltd on 25 November 2014. The three shareholders have addresses in China.

On 5 September 2018 an application for putting Kingstown Blue Spring Resort Ltd into liquidation was filed in the High Court at Rotorua.