A multimillion-dollar prime spot of land close to the centre of Rotorua has gone on the market with locals hopeful a developer will snap it up for a residential housing project.

The site, on the corner of Malfroy Rd and Ranolf St, has been put on the market by its owners, the Church of Jesus Christ of Latter-day Saints, after its plans to build a church there never eventuated.

It was also previously the site of a transit camp for families awaiting state housing before the Voyager Resort Hotel was put there between 1983 and when it was demolished in 1988.

It has had a few owners since, including a Japanese businessman who intended to build a hotel on the site before his plans were crushed by a market crash.

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The large section of land on the intersection of Malfroy Rd and Ranolf St is for sale. Photo / Colliers International
The large section of land on the intersection of Malfroy Rd and Ranolf St is for sale. Photo / Colliers International

The site has been empty since 1988.

Colliers International agent Mark Rendell said the church bought the site with the intention of building a church but the plans fell through.

"The church has realised what an asset they have sitting there doing nothing and have now decided to move it on and put their energy into something else."

The 20,011sq m site is zoned residential 2, meaning it was ideal for a residential property developer, Rendell said.

However, he had also been fielding interest from out-of-town investors who could be looking at the land for a motel development. If it were to become a motel, the developers would need to apply to the Rotorua Lakes Council to change the resource consent.

Fellow agent Jon Whisker said the land was in a prime location close to Rotorua's central city and schools. He said it lent itself to a residential development, which would help ease Rotorua's house shortage.

A woman, who didn't want to be named, who has lived opposite the empty site for the past 34 years told the Rotorua Daily Post she was pleased the land was finally being developed.

However, she said she worried a commercial development would mean an increase in traffic on the already busy road.

She said ideally she would like to see nice houses built on the site.

"I love this area, it's central to everything and there's thermal heating making it nice and warm in the winter."

Meanwhile, Rendell said while the interest had been good so far, he had expected more inquiries.

The Church of Jesus Christ of Latter-day Saints was approached for comment.

Tenders close next Thursday at 4pm.