A portfolio of four retail units within new development projects in Queenstown – encompassing both commercial accommodation and mixed-use residential sites – has been placed on the market for sale.
The units are being sold as tenanted investment opportunities located at either Frankton - immediately adjacent to Queenstown’s international airport, or in the town’s central business district.
The portfolio – which can be tendered for individually, as one combined parcel, or in any combination of the four sites, consists of:
·A 144 square metre foodservice premises within the 131-unit Ramada Queenstown apartment complex at 24 Frankton Road
·A 214 square metre street-level restaurant premises within the 54-unit Ramada Remarkables complex at 24 Hawthorne Drive in Frankton
·A 136 square metre street-level retail site also within the Ramada Remarkables complex housing a physiotherapists suite, and a car-hire business’s offices and
·A 147 square metre retail foodservice premises within the 55-unit Wyndham Garden apartment complex at 32 Red Oaks Drive in Frankton.
All three of the Ramada/Wyndham sites in Queenstown are being built by privately-owned New Zealand construction business Safari Group (NZ) Limited which has a long track record of successfully developing hotel mixed-use properties throughout the country.
The four Queenstown properties are being marketed for sale through a private treaty process being jointly managed by Bayleys Auckland and Bayleys Queenstown, with offers closing on August 8. Bayleys Auckland salesperson Stephen Scott said the permutation of properties within the portfolio offered both diversity and scale to potential investors.
At the Ramada Queenstown location, the freehold unit-titled street-level premises houses Redwoods restaurant which is on a 10-year lease through to 2027 with three further four-year rights of renewal currently generating a net lease of $157,000 plus GST per annum.
Redwoods intends operating seven days a week, serving casual dining Euro-Kiwi food to both local customers and hotel guests. It’s profile includes an extensive al-fresco dining area.
The Ramada Queenstown complex consists of freehold unit-titled premium furnished apartment-style rooms, along with a gymnasium, conference facilities and a restaurant at its CBD site. The building is due for completion by September this year.
Meanwhile at the Ramada Remarkables, three vastly different tenancies occupy the two commercial units being offered for sale, said Mr Scott.
The ground-level property hosts the family-run café Frank’s Eatery specialising in breakfast and lunch service. The business opened in 2017 and is on a seven-year lease through to 2024 with three further four-year rights of renewal currently generating a net lease of $129,306 plus GST per annum.
Also on the ground floor, two tenancies are contained within the single 136 square metre unit. Queenstown Physiotherapy is on a six-year lease through to 2023 with two further -year rights of renewal. The Ramada Remarkables clinic is one of four locations Queenstown Physiotherapy operates from in the region – with the other sites in Queenstown and Arrowtown.
Neighbouring insurance, investment and mortgage broking firm RMA Financial is also on a six-year sub-lease through to 2023. Combined, the two tenancies generate a net lease of $85,467 plus GST per annum.
The boutique Ramada Remarkables at Remarkables Park in Queenstown’s suburban Frankton district contains 54 rooms units with 56 car parks and five retail units on the ground floor. National big-box retailing tenants within the wider Remarkables Park Town Centre include The Warehouse, Noel Leeming, Harvey Norman and New World.
Completing the portfolio, the 147 square metre retail corner unit at Wyndham Gardens is leased to Frank’s Pantry – sister operation to Frank’s Eatery. Frank’s Pantry opened last year and is on an eight-year lease through to 2026 with three further four-year rights of renewal currently generating a net lease of $111,850 plus GST per annum.
Wyndham Garden - franchised by global chain Wyndham Hotel Group – is located two minutes’ drive from Queenstown Airport and 12 minutes’ drive from Queenstown’s town centre. The development comprises 75 serviced apartment units, 55 residential apartments, and eight retail and office units – anchoring the Remarkables Park Town Centre which encompasses a wide range of neighbourhood amenity shops, businesses and food and beverage outlets.
Bayleys Queenstown salesperson Stacy Coburn said the substantial investment by Safari Group in creating new commercial accommodation and supporting retail locations within the Wakatipu Basin was at the bow-wave of Queenstown’s hotel sector – which had been “fizzing” for some nine years.
“Healthy financial returns being generated from Queenstown’s currently operating hotels have spurred major investment programmes in the sector over the foreseeable future, with the Ramada and Wyndham properties coming onto the market at the head of the pack.
“Some 16 new hotels are on the drawing board to be built in the Lake Wakatipu area. If all the mooted hotels came to fruition, and additional 2,824 rooms would be added to Queenstown’s inventory by 2025.
“Among them is another Safari Group (NZ) Limited property – the $90 million Ramada Kawerau River property which encompasses 87 hotel unites and 97 residential apartments. Construction there is on track to begin this month.”
Statistics collated from a range of Government departments and tourism industry bodies all show the past nine years have been a prosperous era for the Queenstown region’s accommodation sector, and wider tourism industry.
Headlining the sector’s prosperity, The Ministry of Business Innovation and Employment’s Regional Tourism Estimates for the year ending January 31, 2019, showed that both domestic and international tourism spend in Queenstown had reached new peaks – with international guests splashing out NZ$1.5billion in the local Queenstown economy, and domestic holidaymakers handing over NZ$837million in the region.
The combined tourism spend figure of $2.34billion is more than twice the 2010 amount of $1billion.
Statistics New Zealand’s most recent Accommodation Survey tracked that there were some 3.69 million guest nights in Queenstown for the year ending January 31, 2019 – up 3.1 percent from the same period in 2018. The bulk of Queenstown’s commercial accommodation providers are in the four and five-star categories.
The Accommodation Survey report noted: “New Zealand’s tourism sector has boomed over recent years as overseas visitor numbers have increased sharply. Queenstown with its international reputation as an adventure tourism centre has been one of the major beneficiaries of increased spending.”
Tourism Industry Association figures show that across both categories of four and
five-star rated properties in Queenstown, annual occupancy rates for the year to April 30, 2019, sat at 81.3 percent – substantially up from the 65.6 percent benchmark recorded in 2010. The association reported that in the peak summer months of January and February, hotel occupancy rates sat at around 93 percent.
Concurrently, the association’s data also showed that average nightly room rates for hotels in the region rose from $155 in the year ending March 31, 2015, to $249 for the year ending March 31, 2019. At the same time, revenue per available room increased from $116 to $203.