The Quest serviced apartment hotel for sale at 1192 Hinemoa St, Rotorua.
The Quest serviced apartment hotel for sale at 1192 Hinemoa St, Rotorua.
The land and building encompassing the 36 suite Quest serviced apartment hotel at 1192 Hinemoa St in Rotorua's central business district has been placed on the market for sale.
"This is one of the few serviced apartment hotels in Rotorua," says Bill Wilson of Bayleys Rotorua who, with colleague James Chan of Bayleys Auckland, is marketing the property for sale through a tender process closing on August 6.
Wilson says the four storey freehold premises was converted from a commercial office block and cafe in 2012 specifically for the Quest accommodation chain. The original building dated back to the 1960s and was completely refurbished and strengthened before reopening in its new guise.
The north facing 2282 sq m building sits on a rectangular 910 sq m site and has two tenancies facing directly onto Hinemoa St in an rea zoned Commercial A. The property has 15 car parks - seven of which are under cover.
Macphee Hospitality Limited, operator of the Quest serviced apartment franchise in central Rotorua, has a 10 year lease on the bulk of the building generating annual rent of $486,540 plus GST. The lease, which expires in 2022, has three further five year rights of renewal and regular rental reviews.
Wilson says the hotel's 36 units comprise a mixed configuration of studio, suite, one and two bedroom units. The property is located just a few hundred metres walk from Rotorua's aptly named main hospitality precinct, Eat Street, and surrounding retail and commercial areas. Week day bookings predominantly come through from the corporate sector, while leisure travellers make up the bulk of weekend reservations.
Another tenant, employment agency Workbridge Incorporated, has a three year lease with two further three-year rights of renewal on a 159 sq m corner of the ground level floor paying annual rent of $30,000 plus GST per year.
The tenancy comes with five car parks and access to staff bathroom facilities. Workbridge Incorporated is a government funded agency established in 1990 to promote equal employment opportunities for people with disabilities.
Wilson says the building's central city location delivers not only a solid guest night offering for the hotel operators, but also convenient access for clients of Workbridge's services.
"The Quest tower is one of the most modern buildings in Rotorua's CBD and has two excellent tenants - making it an outstanding investment opportunity for the likes of a family trust or a high net worth individual with roots in the city," he says.
A typical guest room in the Rotorua's Quest hotel.
"The neighbouring retail, hospitality and commercial properties in and around Hinemoa Street have long term potential for modernisation and reformatting. Yet there is minimal likelihood that any new development of those sites would rise taller than two or three storeys - thereby underpinning the current aesthetics and upper level views of the Quest tower.
"A total refurbishment of the building was undertaken just three years ago so the internal infrastructure including lifts, electrical wiring, plumbing, fire alarm system, and air conditioning units is all in an excellent condition."
The Hinemoa St premises is constructed of steel reinforced concrete floors and columns, double glazed aluminium joinery, steel stud internal partitions with gib board linings, timber framing, and a colour steel roof.
All apartments are individually air conditioned through a Daiken commercial system located in the plant room on the roof and rooms are serviced by a commercial gas hot water system.
"Rotorua's tourism growth along with the quality of the hotel's construction and fit out are expected to attract international buyer interest," Chan says.
Statistics New Zealand reports there were 85,000 international visitor nights spent in Rotorua's commercial accommodation in April this year - up 10,000 nights or 14 per cent compared to the same period in 2014.
James Chan of Bayleys.
Rotorua's attraction and activities sites experienced a 14 per cent rise in international visits - up 20,000 visits to 155,000 visits. And the value of electronic card purchases by international visitors in Rotorua also increased 31 per cent with the US market in particular driving the expansion.
Chan says several economic reports produced on Rotorua over the past six months all indicated a positive outlook for the city on multiple fronts - ranging from job opportunities in the manufacturing and light industry sectors through to growing visitor nights in the tourism sector.
"With this ever increasing local business confidence, Bay of Plenty investors are looking more at buying commercial grade investment properties in Rotorua rather than Auckland where the yields are now often less than five per cent. That's a big tick of support for the local region," Chan says.
