Devonport's historic Esplanade Hotel on Auckland's North Shore is for sale with multiple leases in place offering the next owner net annual rental income of around $380,000.
The 1832 sq m 115-year-old building, which has an Historic Places Category 1 listing, is located on a prime 1084 sq m waterfront site on the corner of Victoria Rd, Devonport town centre's main street, and Queen's Parade, opposite the Devonport ferry terminal.
Featured in Bayleys' latest Greater Auckland portfolio, the harbour frontage landmark is being offered for sale by international tender closing July 3 unless it is sold earlier by private treaty.
"This is an investment offering with a real difference," says James Chan of Bayleys' international division, who is marketing the hotel with colleague Matt Lee in conjunction with Terry Kim of Bayleys North Shore Commercial.
"The sale offers a rare opportunity to purchase one of Auckland's trophy heritage buildings," says Chan. "The next custodian of this historic Devonport landmark will benefit from a significant cash flow from a variety of occupants. There could also be an add value expansion opportunity for someone with a passion for heritage buildings."
Aerial view of Devonport on Auckland's North Shore depicting the Esplanade occupying a prime corner site.
The three level building is occupied by two major tenants. One is the Esplanade Hotel itself, a boutique hotel accommodation business comprising 17 hotel suites on the top two levels which total 880 sq m, along with a restaurant, function and bar area on the 950 sq m ground floor.
The other main tenant is Number One Bistro, a neighbourhood restaurant occupying 370 sq m of space within the building plus a 40 sq m sheltered courtyard. Additional income is provided by three separate telecommunication leases to Vodafone, Spark NZ and 2degrees.
Chan says the current owners completed a major refurbishment of the building when they acquired it in 2004. "Everything has been done in keeping with the hotel's Edwardian styled interior of high ceilings, elegant, spacious rooms with original windows and a grandeur that has been lost in many New Zealand hotels."
The new operator of the hotel and restaurant has also undertaken a significant renovation to the ground level bar area which has been reconfigured to include a 'High Tea' room. This leads into a well appointed dining and function area with polished timber floors and high stud, ornate ceilings with chandeliers.
The ground level bar area which has been reconfigured to include a 'High Tea' room at the Esplanade Hotel.
Chan says The Esplanade is a popular corporate event and wedding venue because of its seaside ambience, waterfront location and easy accessibility via regular ferry services from the Auckland CBD. It can cater for up to 100 guests, with vintage High Tea weddings a specialty.
Ten of the guest suites are located on the second floor. A further seven on the top floor, include a two room self contained penthouse suite with a fireplace and its own kitchen and balcony with harbour views.
Good use of the corner site location provides a range of unobstructed views from the hotel rooms across the harbour to the Auckland CBD, Windsor Reserve or Mt Victoria.
James Chan of Bayleys.
The history of The Esplanade Hotel dates back to 1900 when Northern Property Limited purchased the old Flagstaff Hotel situated on the site. Plans were drawn up to replace the Flagstaff with a grand hotel modelled on the late Edwardian aged waterfront promenade hotels of the English seaside resort towns of Brighton and Blackpool. The Esplanade was named after the best known resort hotel in Brighton.
Construction of the £7000 hotel was started in 1901 by leading builder William Cranston and completed in February 1903. The Esplanade quickly became established as a well run popular seaside resort hotel with the convenience of a 10 minute ferry trip from the bottom of Queen Street being a major draw card then as it remains today for both locals and visitors to Auckland.
Heritage New Zealand says few large hotels survive from the turn of last century and the fine, ornate facade of the Esplanade is particularly rare. Prominent features of the building include heavily ornamented parapets, elaborately decorated plasterwork, including urns, and double-hung sash windows.
Chan says there may be potential to redevelop and further expand the building's foot print at the rear of the site where a number of extensions have been added over the years which have no particular historical value.
"Obviously this would need to be done in consultation with Heritage New Zealand and Auckland Council given the high level of heritage protection that the building has," he says. "There have been some preliminary discussions with architects about what building enhancements might be possible within that historical classification and we would be happy to put any interested parties in touch with them."
The Number One Bistro at street level within the Esplanade Hotel building.
The sale comes at a time when a $5.5 million upgrade of neighbouring Devonport Wharf by Auckland Transport is underway. This includes a refurbishment of the wharf's entrance, a new boardwalk and an upgrade of Marine Square from a car park to an integral and appealing part of Devonport village's new gateway.
Kim says the transformation of Marine Square into a more open public space will improve the visibility of and access to the Esplanade Hotel. "People coming out of the ferry terminal now walk directly across the square towards the hotel and Victoria Street. The upgrade will also enhance the Esplanade's connection to the waterfront."
Matt Lee of Bayleys.
Lee says close to two million passengers, including many tourists, pass through the Devonport ferry terminal annually. He says the short direct ferry link with downtown Auckland and the building's historical status and waterfront location enhances the Esplanade Hotel's appeal to visitors to Auckland.
Lee says hotel occupancy rates in Auckland are at record levels, at over 80 per cent and there are very few boutique heritage hotel accommodation options in the marketplace, particularly on the waterfront.
Annual Auckland hotel domestic guest nights for the year ending February 2015 increased by seven per cent compared to the February 2015 year.
"It is the first time ever Auckland has reached over four million domestic annual guest nights in one year," says Brett O'Riley, chief executive of Auckland Tourism, Events and Economic Development (ATEED). "It's also the first time Auckland has reached three million annual international guest nights."
Terry Kim of Bayleys.
Visitors are staying longer too with the average length of stay up 4.4 per cent to 2.12 nights, says O'Riley. "It's interesting to note that hotel occupancy rates are continuing to rise despite more hotels being built over the years which shows Auckland's strong and consistently growing visitor economy," he says.
The Auckland Visitor Plan - created by ATEED on behalf of Auckland Council - aims to grow the region's visitor economy from a $4.8 billion industry in 2012 to a $7.2 billion sector in 2021.
