Dunedin land could suit a hotel

A group of buildings in the foreground stands on the land for sale between Anzac Ave and Harrow Sts. Photo / Supplied

One of the biggest chunks of commercial real estate located on the fringe of Dunedin's central business district - and adjacent to the education hub - is now for sale.

The 7913sq m site encompasses five adjoining titles between Anzac Ave and Harrow St. Combined, the five properties generate an annual revenue of $408,200 net.

Because of their configuration, the five individual titles are being sold as one entity, comprising:

• 53 Anzac St - where a 2100sq m building is leased through to 2020 to shop fit out design and build firm Miller Creative.
• 79 Harrow St - where a light industrial-use premises is leased to Otago Polytechnic as a workshop, through to 2019.
• 83-87 Harrow St - where the ground lease brings in $29,872 per annum. The property sustains three student flats.
• 89-91 Harrow St - containing a four-bedroom house, and 30 storage units let on a monthly basis.
• 93 Harrow St - encompassing a 250sq m warehouse.

The single block portfolio is being marketed by tender through Bayleys Dunedin, with tenders closing on August 2 and features in Bayleys' latest Total Property portfolio magazine.

Bayleys Dunedin director Robin Hyndman says the block is between the CBD and Forsyth Barr Stadium - flanked by hospitality, university and polytechnic precincts. He says the sites are worth more as one combined lot than they are individually and few landholdings of this scale are available so close to the city centre.

The land is zoned industrial 2 under the city council's district plan - with the potential that the classification could be amended to a residential 3 zoning.

"The flexible zoning rules recognise that the land may have numerous uses. Such is the central location that the site could continue in its industrial use, or may be better served utilising its immediate proximity to the university and polytechnic as a residential development," Hyndman says.

"Alternatively, because of its location, the site could be developed into a more intensive and modern accommodation facility - expanding halls of residence options for the university and polytechnic 500m away, with the potential to have some boarding amenities potentially allocated as a nurses' home - with the hospital 500m away in the other direction."

Hyndman says because the site is in walking distance of the city centre and the Forsyth Barr Stadium, it would be the ideal location for a much-needed four or five-star hotel.

"With two access points off separate roads, the configuration of a hotel within the property would allow easy entry and exit traffic flows for tour group buses," he says.

"The multiple and varied tenancy schedule would deliver sizeable holding income while the necessary council consents are obtained for any development of this sort. That's attractive for developers."

Hyndman anticipates any interest in a hotel development will most likely come from offshore or Auckland-based investors, while a conversion into halls of residence would prove an attractive option for Dunedin-based investors.

"Other commercial uses, such as offices or retail tenancies, are a possibility and I understand are being explored by some parties," he says.

"Because of the size, a commercial development would allow for the option of building 'business park' type complex of several blocks or towers.

"Ample car parking spaces would be catered for because there is so much land and the dual road entry points. Closeness to the CBD is a benefit for any new business tenants."