0ne of Hamilton’s most prominent central-city landmarks – comprising a boutique heritage hotel and numerous street-level food and beverage eateries - have been placed on the market for sale.
The substantial inner-city block on the corners of Victoria Street, Collingwood Street and Alexandra Street – known as The Wesley and Methodist Blocks - encompasses the four-star VR Hamilton hotel as its anchor tenant in the heritage-listed portion of the property together with backpacker’s accommodation.
The combined properties cover a total land area of 4,044 square metres contained in two titles, with three road frontages on Victoria, Collingwood, and Alexandra streets. The freehold tenure of the property is owned by the Hamilton Methodist Church Trust and the property is subject to a 150-year ground lease.
The imposing four-storey 237 Victoria Street address containing the 39-room VR Hamilton hotel complex, along with the backpacker’s rooms and amenities, has a Category-A heritage listing. Originally constructed in the early 1900s as The Wesley Chambers, the upper two floors were added in the 1910s to become was the first multi-storeyed building in Hamilton constructed of reinforced concrete, and the first to have a lift.
In total, the majority-leased block for sale sustains 16 tenancies – generating a combined annual net rental income of approximately $711,000. Among the retail tenancies within the block are multiple ethnic eateries and fast-food outlets, a tattoo studio, a foodservice operations supply company, a convenience store, and several small professional services companies occupying office space. Expiry leases for the smaller tenants stretch as far out as 2031 but include demolition clauses.
Combined, the various buildings within the block provide some 7,630 square metres of mixed-use space. The 237 Victoria Street portion of the block sustains the hotel and its three function areas, and ground-floor retail - totalling some 3,580 square metres. Meanwhile the 7–29 Collingwood Street portion of the block sustains the 60 bed backpacker’s, offices, and street-level retail outlets, totalling some 4,050 square metres of space.
The property has covered parking for 25 cars at the rear of the building - accessed from a service lane running off Alexandra Street. Most of the car parks are utilised by hotel and backpacker guests. Substantial additional short-term parking is available on all three streets immediately outside the premises.
The buildings and leasehold land interests at 237 Victoria Street and 7-29 Collingwood Street have now been placed on the market for sale by expressions of interest, with the process closing on April 15.
The property is being jointly marketed for sale by Bayleys Auckland and Bayleys Hamilton. Salespeople Layne Harwood, Paul Dixon and Steve Pett said the vendors would also consider selling the hotel and backpackers business as a going concern if potential buyers were interested.
“The historic block represents a diversely tenanted split-risk opportunity right in the middle of Hamilton, with rental income upside when vacant premises within the block are tenanted,” said Harwood.
“These lengthy ground lease term allows any potential new owner the opportunity to look at redeveloping some of the upper floor spaces to create new commercial premises. The leasehold arrangement also delivers a lower initial outlay compared to purchasing the freehold.”
The one and two-storey buildings within the block have a new build standard rating of 16 percent, while 237 Victoria Street has a new build standards rating of 36 percent, and the more modern 7–29 Collingwood Street premises has a new build standards rating of 70 percent.
The block is zoned central city under the Hamilton City Council plan, with a heritage overlay for The Wesley and Methodist Blacks component. The central city classification permits retail activities, commercial office space use, entertainment venues, restaurants, education and training facilities visitor accommodation, community centres, and aged care homes.
Other landmark buildings and amenities nearby include Sky City Casino, Centre Place Mall, the Ramada by Wyndham Hamilton hotel, the Novotel Hamilton Tainui hotel, Waikato Museum, and Hamilton City Council’s Victoria on the Park precinct. Also, the proposed Waikato Regional Theatre is situated opposite.’