A substantial tourism complex in central Rotorua is up for sale with a renewed lease in place to its longstanding operator.
The land and buildings of the 2570 sq m Apollo Hotel complex on a 2864 sq m site at 7 Tyron St are up for sale. The hotel business’ current lease commenced in 2008 and it exercised the first of three five-year rights of renewal in September last year.
Featured in Bayleys’ first Total Property portfolio for 2018, the property is for sale by tender closing Thursday, March 21at 4.30pm, unless sold prior. It is being marketed by Owen Ding and Millie Liang of Bayleys’ Auckland-based international division in conjunction with Bayleys Rotorua’s Mark Slade.
Ding says the Apollo Rotorua has a variety of newly refurbished accommodation with modern facilities including a swimming pool, spa, sauna and fitness centre plus car parking for guests. A small conference room can also cater for meetings of up to 30 people. The buildings meet current earthquake standards, with a seismic assessment of 75 per cent of New Building Standard (NBS).
Ding says being an apartment hotel, the Apollo has a point of difference from traditional hotel or motel accommodation and offers high quality, serviced apartment options. “Guests can choose from a range of accommodation from smaller hotel studios to fully self-contained one or two bedroom apartments tastefully furnished with well-equipped kitchen and laundry facilities,” he says.
“The property is very well located in the popular Whakarewarewa geothermal tourism precinct only a minute’s walk away from the Maori Village and an easy drive to the Polynesian Spa and Blue Baths.”
Whakarewarewa Forest is also approximately 10 minutes’ walk or a short bike ride away. The trails in the forests attract an estimated 230,000 mountain bikers per year and between 600,000 - 800,000 other annual visitors.
Millie Liang says the long-term nature of tourism leases, such as the Apollo Hotel’s, makes then attractive to investors. “The Apollo lease will run for close to 15 more years if it continues to exercise its rights of renewal. Knowing that they have a long surety of tenure, tenants also are generally prepared make a significant investment in furnishings, fittings and amenities, with regular refurbishments undertaken to maintain their market appeal. This also increases the property’s appeal to investors when offered for sale.”
Liang says another drawcard for investors is the Apollo lease’s built in rental growth. The property is currently generating annual net rental income of approximately $345,870 with fixed rental increases of two per cent per annum. There is also a review to market scheduled for each lease renewal date.
Latest statistics for the Rotorua tourism market show that guest nights spent in Rotorua’s commercial accommodation were up 3.4 per cent to 2,330,051 in the November 2018 year, exceeding the national increase of 2.6 per cent. While international guest nights declined slightly (0.8 per cent), they were more than offset by a 5.9% increase in domestic guest nights.
Mark Slade says Rotorua has had 21 consecutive months of growth in domestic guest nights spent in commercial accommodation. “This underlying trend of continuous growth indicates Rotorua is retaining and increasing is popularity as a destination for domestic visitors - particularly Aucklanders who visit all year round drawn by Rotorua’s many attractions and who also make up the bulk of business visitors.
“To have such a sustained run of growth points to Rotorua not resting on its laurels but continuing to offer new and exciting visitor experiences. The Famously Rotorua domestic consumer marketing campaign which commenced five years ago has been a very successful initiative.”