McNab says there is ample scope to develop the vacant components and, hence, increase the rental return. The high-profile inner-city property, close to the marina, river and city amenities, has lease agreements in place for the three commercial ground-floor retail tenancies and varying lease arrangements for the residential component.
"Given the receivership status, we are still piecing together the financial picture, but the fact that the property is being offered at auction indicates the receiver's motivation to get the property sold," said McNab.
It has a 23m frontage to Gladstone Rd and 50.49m frontage to Lowe St in a high pedestrian area of the Gisborne CBD zoned Inner Commercial. There is a recessed entranceway off Lowe St, which services the upper floors.
"The property has recently had a new roof installed, but there are still significant areas within the building crying out for redevelopment," says McNab.
"Disused areas include the bar, amenity and storage spaces to the rear of the ground floor, along with the bar and former ballroom areas on the first floor. These could be turned into office tenancies or further apartment use with some creative thinking."
There are three existing tenancies on the ground floor fronting Gladstone Rd. The tenants, Subway, La Cor hairdressing and Evolution Clothing, pay for power, water and telephone.
The total annual rental income from the commercial component is about $61,650, including operating expenses, plus GST.
There are a further two vacant retail and one office tenancies on the ground floor with some remedial work required to bring them up to rentable standard.
Eleven residential apartments are available for lease and the property is returning circa $90,000 yearly less expenses, from a number of periodical tenancies within the residential apartments. This amount will vary based upon occupancy levels, with areas of vacant space providing an opportunity for adding further value.
The apartments range in size from a modest 33.9sq m to the former owner's apartment No 101, which has a floor area of 260sq m.
"This apartment on the first floor has five bedrooms, four bathrooms, separate dining and living areas and a balcony overlooking Gladstone Rd, which is the balcony where the Queen and Prince Philip were photographed on their royal tour," says McNab. "Character remnants of the former Masonic Hotel include native timber floors and ornate ceilings."
The property is a Category 2 listed building with the New Zealand Historic Places Trust and a Category A historic building under the Gisborne District Council's district plan.
The hotel complex was constructed from 1928-30, according to Historic Places Trust records.
