Buyer poised for prime city waterfront site

An investor is set to buy the 1.6 ha property. Photo / John Borren

A conditional sales contract has been signed for a prime Tauranga commercial waterfront property with a capital rateable value of $9 million.

The 1.6ha property in Cross Rd that formerly housed Pachoud boat builders was now a mixed-used block of buildings that included the University of Waikato's Coastal Marine Research Station and the head offices of C3, a major stevedore business.

Commercial industrial broker for Colliers International Duncan Woodhouse said a sale and purchase agreement had been signed with a Tauranga-based investor who was now going through due diligence on the property.

The Cross Rd site has attracted a fair amount of interest.

The buyer had until mid-December to complete investigations on 50A Cross Rd and decide whether to go unconditional. It included issues such as whether the property fitted investment parameters, legal details, the condition of the buildings, the strength of the tenants and the viability of future development. Colliers was not in a position to disclose the name of the investor or how much the sale and purchase agreement was worth.

The property next to the boat ramps and Nautilus apartments and boat stack is owned by Irish investors Aidan and Darren Harrison who planned a massive $65 million redevelopment of the site incorporating a technology park, apartments and shops.

However, the council refused to allow a 74-unit apartment complex to be part of the development sited in the port commercial zone.

Its decision coincided with the collapse of the property market when the Global Financial Crisis hit in 2008.

Mr Woodhouse said there had been strong interest in the property, with lower offers for an unconditional sale.

"It is a balancing act between unconditional offers and price."

The prospective purchaser had not disclosed whether they had plans to immediately re-develop the site, he said.

"We are working with a party that we believe has the ability to settle on the property."

"They have a good knowledge of the area."

The Port of Tauranga told the Bay of Plenty Times that it was not the purchaser.

Simon Clark, the managing director of Colliers' Tauranga office, said the council had previously consented a mixed-use office and 15,000 to 20,000sq m technology park.

His gut feeling from those who showed an interest in buying the property was that they were more interested in rental returns from current tenants than development opportunities.

He said there had been a handful of offers.

The property was not everyone's cup of tea because the tenants were not on long-term leases - reflecting the flexibility sought by the owner to redevelop the site.

Mr Clark understood most of the tenants wanted to stay there and sought longer leases.

The Harrison's development company Channor NZ, built the Nautilus boat stack and apartments behind the Chapel St wastewater treatment works.

The 2012 capital rateable value for 50A Cross Rd was $9.07 million.

The University of Waikato was considering a proposal that could see its research station relocate to the nearby Marine Precinct being developed by the Tauranga City Council.