An opportunity to acquire the land and buildings that are leased to the thriving Mt Richmond Hotel and Conference Centre, has come up for sale for the first time in many years.
Marketed by Warren Hutt and Brett Whalley of CBRE, the fully leased, freehold 44-unit Mt Richmond Hotel and Conference Centre at 676 Mt Wellington Highway is a deceased estate for sale by Deadline Private Treaty, with offers to be submitted no later than 4pm on 4 April 2019
Warren Hutt says that leased hotel assets of this type seldom get offered to the market for sale.
“This is a tremendous opportunity to acquire an investment in an asset class that is performing well and experiencing record occupancy rates and growth. The conversations we are having already in the market reveal that this well-presented, tidy hotel investment in an evolving location, with a zoning to enable development, has strong and wide appeal to long-term passive investors, land holders, the hospitality sector, and more widely.”
Occupying a large 2,832sqm corner site on Mt Wellington Highway and New Brighton Road, the two- and part-three-storey Tudor-style property built in the 1980s features 43 studio units, a two-bedroom family unit, gym, spa room, swimming pool and courtyard, plus ample car parking.
In addition to the trading income provided by the accommodation, the 4* Qualmark hotel enjoys income from a variety of other sources including conference facilities on two floors to accommodate 270 people, a licensed 172.98sqm restaurant and bar, and a 65sqm gaming room.
The hotel is leased to J&Y Hotel Management Limited on a lease that is set to expire in May 2020, although the lessee has a right of renewal of 20 years. Annual net rental is $457,000 per annum + GST and rent reviews are every three years, with the next review set for 15 May 2021.
Brett Whalley says that the 2,832sqm site offers a high land value component with long-term redevelopment potential.
“This is a great piece of land that is zoned Residential – Terrace Housing and Apartment Buildings Zone (THAB). It has been earmarked by Auckland Council for intensive future development. This zone encourages urban residential living in the form of terrace housing and apartments.
“In short, it has alternative best uses and could be redeveloped in what is currently a sleeper suburb that is starting to become an up-and-comer. It has considerable upside: a strategically located property on a high-profile corner site in a very convenient and accessible south-eastern location.”
Mount Wellington is a mix of warehousing, industrial and commercial properties along the main arterial routes, together with residential homes built from the 1950s through to the present day. It is a popular and well-established area, says Whalley.
“In this location, the property enjoys access to a variety of good quality primary and intermediate schools nearby. Of note, the public Otahuhu College and the exclusive Kings College are both nearby. Key services in this area include a full range of convenience and fashion shopping at Sylvia Park, plus a diverse range of health, finance, banking and general retailers in Otahuhu. Middlemore Hospital, Mt Smart Stadium and Waikaraka Park are reasonably close by, and the pleasant and planted reserve of Mount Richmond Domain is just across the road.
“It is a strategic Auckland location, only a short drive to the southern motorway via Princess Street on-off ramp, and thus to the airport. If you dropped a pin in the city you’d probably hit this very central location.
“As a result, there is considerable investment coming into the area – a lot of commercial development going on. The big supermarkets are coming, and Sylvia Park is moving swiftly to become a metropolitan town centre. It’s an up and coming area whose time has come.”
This is backed by Hutt, who says: “676 Mt Wellington Highway is extremely well positioned for the future. It is a property with a thriving lessee on it, on a large lot size that will appeal to a number of investors, particularly given its strong underlying land value, location and development potential. A great purchase for a keen investor.”
ABOUT CBRE GROUP, INC.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com..
