Rotorua's hot property on market

Rotorua's iconic Hot Rock backpackers and Lava Bar.

The Hot Rock backpackers and Lava Bar are tourist icons in a tourist city.

A multi-storey building housing a pioneering New Zealand backpacker hostel, which instituted The Sanctuary - a girls-only area included in each of its buildings - is on the market for sale.

Base "Hot Rock" Backpackers at 1286 Arawa St in central Rotorua forms one of 13 Base Backpackers operations in Australasia. The Rotorua facility comprises 171-bed budget accommodation over four levels, ranging from double ensuite rooms to 12-bed dorms. The business includes the licensed Lava Bar hospitality venue next door.

The building is leased to Base Backpackers on a new 10-year term, with five five-year rights of renewal at a net annual rental income is $350,000 plus GST. Marketing the backpackers building and the adjoining bar for sale by tender closing on August 1 are Bayleys salespeople Grant Young, Mark Walker and Mark Slade.

Young says the sale represents a good opportunity for an investor seeking a high profile investment property with a long established international tenant.

"Base Backpackers has built up a worldwide reputation for travellers for offering good clean facilities, security, and a great travelling experience. It is regularly used by coach tour providers Kiwi Experience, Stray Bus and Auckland Adventures."

The 2530 sq m backpacker building has a reception/lobby, management office, kitchenette and five double/twin bedrooms on the ground floor, including a bedroom for coach drivers. The first floor has six dormitory rooms of mixed configuration, a communal kitchen and dining area, and television lounge. The second floor has eight dorm rooms, and the third floor 11 dorm rooms. Most rooms feature a small balcony with views overlooking Kuirau Park, a thermal area.

Most rooms have their own bathrooms and balconies and some have their own kitchenette. Shared amenities include a heated spa and outdoor swimming pool, a television lounge, sundeck, luggage storage, high speed wireless internet, dining room, and laundry facilities.

There is also an extensive covered decking area with outdoor tables and chairs and 25 onsite car parks.

The Lava Bar, directly opposite the backpackers building, is a single level building with separate access from Arawa St. The bar has one large central circular service bar, surrounded by open plan area with pool tables, pool tables, flat screen television, and large projector screen.

"The current owners have maintained both buildings to a high standard, having recently completed a major refurbishment of both the backpackers and the Lava Bar," Young says. "The refurbishment included upgrading the bathrooms, fixtures and fittings, and installing new swipe card locks on all of the bedroom doors."

Young says the backpacker chain has built up a reputation by modernising backpackers' accommodation - moving away from the basic facilities budget travellers expected in the 1960s and 1970s, and establishing private room options with ensuite facilities, complemented by onsite amenities such as swimming pools, saunas and licensed bar.

Base "Hot Rock" Backpackers is on the corner of Arawa and Ranolf Streets on the edge of Rotorua's central business district, and within walking distance of the town's hospitality hub and many tourist attractions.