The land and building comprising one of the few serviced apartment hotels in Rotorua’ s central business district has been placed on the market for sale.
The 36 suite Quest apartment building in Hinemoa Street is a three storey premises converted from a commercial office block and café in 2012 specifically for the Quest accommodation chain. The original building dated back to the 1960s and was completely refurbished and strengthened before reopening in its new guise.
The north-facing 2282 square metre building sits on a rectangular 910 square metres of land, and has two tenancies facing directly onto Hinemoa Street. The area is zoned Commercial A.
Macphee hospitality Limited – operator of the Quest serviced apartment franchise in central Rotorua – has a 10-year lease on the bulk of the building, expiring in 2022 with three further five-year rights-of-renewal and regular rental reviews. The lease generates an annual rental income of $486,540 plus GST and comes with 15 car parks – seven of which are under cover.
The 36 Quest units comprise a mixed configuration of studio, suite, one and two-bedroom units. The property is located just a few hundred metres walk from Rotorua’s main hospitality precinct, Eat Street, and surrounding retail and commercial areas. Week day bookings predominantly come through from the corporate sector, while leisure travelers make up the bulk of weekend reservations.
Meanwhile, employment agency Workbridge Incorporated has a three-year lease on a 159 square metre corner of the ground level – generating annual income of $30,000 plus GST per year and with two further three-year rights-of-renewal.
The tenancy comes with five car parks and access to staff bathroom facilities. Workbridge Incorporated is a government funded agency established in 1990 to promote equal employment opportunities for people with disabilities.
The Hinemoa Street property is being marketed for sale by Bayleys Rotorua through a tender process closing on August 6. The property is being marketed by Bayleys Rotorua salesperson Bill Wilson and Bayleys Auckland salesperson James Chan.
Mr Wilson said the freehold building’s central city location delivered not only a solid guest night offering for the hotel operators, but also convenient access for clients of Workbridge’s services.
“The Quest tower is one of the most modern buildings in Rotorua’s CBD, and has two excellent tenants – making it an outstanding investment opportunity for the likes of a family trust or a high net worth individual with roots in the city,” Mr Wilson said.
“The neighbouring retail, hospitality and commercial properties in and around Hinemoa Street offer the long-term potential for modernisation and reformatting. Yet there is minimal likelihood that any new development of those sites would rise taller than two or three storeys – thereby underpinning the current aesthetics and upper level views of the Quest tower.
“With the total refurbishment of the building undertaken just three years ago, internal infrastructure such as the lifts, electrical wiring, plumbing, fire alarm system, and air conditioning units are all in excellent condition.”
The Hinemoa Street premises is constructed of steel reinforced concrete floors and columns, double glazed aluminium joinery, steel stud internal partitions with gib board linings, timber framing, and a colour steel roof. All apartments are individually air conditioned through a Daiken commercial system located in the plant room on the roof. Rooms are serviced by a commercial gas hot water system.
Latest data from Statistics New Zealand show there were 85,000 international visitor nights spent in Rotorua’s commercial accommodation in April this year - up 10,000 nights or 14 percent compared to the same period in 2014.
Rotorua’s attraction and activities sites also experienced 14 percent growth in international visits - up 20,000 visits to 155,000 visits. And the value of electronic card purchases by international visitors in Rotorua increased 31 percent - with the US market driving Rotorua’s growth.
Mr Chan said several economic reports produced on Rotorua over the past six months all indicated a positive outlook for the city on multiple fronts – ranging from job opportunities in the manufacturing and light industry sectors through to growing visitor nights in the tourism sector.
“With this ever-increasing local business confidence, Bay of Plenty investors are looking more at buying commercial grade investment properties in Rotorua rather than Auckland where the yields are now often less than five percent. That’s a big tick of support for the local region,” Mr Chan said.
“The quality of the Quest building construction and fit out is also expected to attract international buyer interest.”