Four motels on rising tourism tide

By Colin Taylor

Properties from Hamilton to Gisborne and Taranaki offer good income streams and chance to improve business

The Atrium on Ulster in Hamilton has 28 units with conference facilities, a gym, laundry and storeroom.
The Atrium on Ulster in Hamilton has 28 units with conference facilities, a gym, laundry and storeroom.

Four motel properties and businesses in Hamilton, Rotorua, Gisborne and Taranaki are for sale as part of Bayleys' latest commercial and industrial portfolio and are being marketed by the agency's representatives based in each of the four regions.

In Hamilton a purpose-built motel complex, The Atrium on Ulster, is being sold as a freehold going concern.

Alternatively it could be sold as a tenanted investment with a separate leasehold sale of the land and buildings, says Andrew Shaw of Bayleys Hamilton who, with Hamilton colleague Mike Swanson, and Shiona Dyer of Bayleys Central Auckland, is marketing it for sale through a tender process closing on April 3.

The motel complex is just a short walk from Hamilton's CBD at 281-285 Ulster St, where it is well placed for foot and vehicle traffic in a central high-profile location.

"This is an immaculately presented complex with a Qualmark four star plus rating and it consistently has occupancy levels of 65 per cent with a good base of repeat corporate clients," Shaw says.

"The owner has significantly invested in the enhancement and maintenance of the property resulting in little or nothing left to do for a new owner or leaseholder.

"Part of the motel's attraction to guests is the quality of the property as a whole, and the high degree of maintenance - both externally and internally - which is undertaken on the grounds and accommodation units," he says.

The property is 2532sq m, with the building area 1396sq m. The hotel has 28 units configured as 14 studio units, eight one-bedroom units and six two-bedroom units.

The complex encompasses conference facilities, a gym, laundry and storeroom, and three-bedroom owners' accommodation.

In Rotorua, the land and buildings comprising the Apollo Hotel at 7 Tyron St are being marketed for sale by auction on April 9 through Bayleys Central Auckland agents Shiona Dyer, Paul Dixon and Mark Slade.

"The Apollo Hotel is a hotel-style apartment business catering to the corporate and leisure tourism sectors and presents an investment opportunity to a potential new owner," Dyer says. Located within the popular Whakarewarewa geothermal park area of Rotorua, the hotel consists of 39 units made up of self-contained studios, interconnecting studios, superior studios and one-bedroom apartments. The hotel's facilities include two reception areas, a kitchen, guestroom, gym, swimming pool, spa/sauna facilities and storage area.

"The hotel has been completely refurbished to a high standard, as part of a major renovation programme in 2008," Dyer says.

"All of the accommodation units have been upgraded including re-lining the rooms, new bathroom and kitchen facilities, with quality chattels and furnishings."

The Qualmark four star plus rated hotel sits on a 2864sq m site and generates a gross rental income of $410,000 plus GST. A 10-year lease with tenant OSR Apartments Limited is in place and commenced in August 2008 with three five-year rights of renewal.

Over on the east coast, the lease for the White Heron Motor Lodge at 474 Gladstone Rd in central Gisborne is for sale, offering a business opportunity to a hands on operator.

The term of the standard motel lease was recently extended to November 2043, says Colin McNab of Bayleys Gisborne who is marketing the proposition.

"With an asking price of $595,000 plus GST for the lease the returns reflect strong trading even through often difficult economic times," McNab says.

"This business opportunity would be ideally suited to a husband and wife or partnership wanting to take a hands-on approach to elevate the already successful business to a new level.

"A hard working couple could create efficiencies in this business that can only come when there is a vested interest in the operation. The opportunities for growing the business and for carving out a solid income and lifestyle are just waiting for forward thinking new owners."

The 24-unit complex is a mix of 17 studios, plus four one-bedroom and three two-bedroom units. A three-bedroom manager's residence has an adjoining reception and office area. Motel facilities include a commercial kitchen, laundry with commercial washers and dryers, storage area plus a separately accessed staff room, guest laundry and storeroom.

Built in 1994, White Heron Motor Lodge is set on a 3036sq m site with good accessibility and has an excellent profile to busy Gladstone Rd which is the main arterial route into the city.

"The units have proved popular with families, commercial travellers, sports teams and conference groups. The larger of the two, dual units is often used as a compact conference facility or training room - adding another income stream to the business," McNab says.

The property holds a liquor licence to allow in-room mini bars and to cater for on-site conferences.

Rounding out the portfolio, on the other side of the central North Island in Taranaki, a boutique hotel complex which generated an annual turnover of $527,623 in the 2013 calendar year is for sale just off Surf Highway 45.

The Headlands Opunake Hotel, which is just a short walk to downtown Opunake, comprises a bar, conference facilities, licensed cafe and restaurant, nine rooms of accommodation and a two bedroom owner's house.

It is being marketed by Bayleys' New Plymouth salesmen Alan Johnston and Iain Taylor through a tender process for the land, buildings and business which closes on April 3.

Johnston says the Qualmark four star rated hotel at 4 Havelock St sits on one freehold 2623sq m title. The owner's accommodation is on a freehold title of 1012sq m, located at 36 Fox St on the northern boundary of Havelock St.

"This property presents an opportunity for a new owner to take over a business that has been established over the past six years in a prime location, near the Opunake CBD and beach," Johnson says.

"There is also the option of developing this business further, with room to expand the existing number of accommodation units on the site." Three buildings are on offer as a going concern with the sale of the business. Firstly the main block, which is on the ground floor with a restaurant, bar, kitchen, conference room, public and staff amenities and reception area. The upper two floors house five of the nine accommodation suites.

The second, single storey block accommodates four studio suites and the laundry.

The third building included in the sale is a two-bedroom, 68sq m cottage.

The business operates seven days a week and currently has six full-time and four part-time staff in addition to the owner.

Bayleys says the hospitality businesses have come to market on a growing tourism market with an accommodation survey by Statistics New Zealand showing annual occupancy rates rising by 2.3 per cent to 53 per cent in December 2013.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf05 at 28 Dec 2014 06:58:01 Processing Time: 583ms