Aotea Gifts buys historic Cathedral Square site

National tourist retailer Aotea Gifts has bought this bare land site, identified by blue shading, in Christchurch's Cathedral Square. Photo / Supplied

National tourist retailer Aotea Gifts has bought the former United Service Hotel site in Christchurch's Cathedral Square for $6,650,000 - the first time the site has changed hands in nearly 100 years.

The strategic 9 Cathedral Square property, occupying the south west corner of Cathedral Square, comprises 1371sq m of bare land and was sold under the hammer at Colliers International after attracting 11 bids.

The agency's managing director Hamish Doig says the price indicates a strong interest and confidence in the future of the Cathedral Square vicinity.

"It's a great price, especially considering that it is harder to get bank funding against bare land," Doig says. "The interest shown in the auction is a sign of confidence in the location and there were several disappointed parties who missed out."

Launched in 1979, Aotea has stores in Auckland, Rotorua, Queenstown, Lake Tekapo and Dunedin.

Previously, Aotea operated its Naturally New Zealand store in Cathedral Square for 31 years.

Before the earthquakes, Aotea Gifts employed 70 people in its three stores and head office located in the Christchurch CBD.

Joint marketing agent Courtney Doig says Aotea Gifts has been waiting for the right site on which to re-establish a high-profile presence.

"Aotea is a long-term investor and is planning a retail and tourism infrastructure facility. It's the perfect location near to hotels, the Cathedral when it is repaired or rebuilt, and it's close to the planned Convention Centre."

Aotea spokesperson Richard Hanson outlined the motivation for the family's commitment to re-establish in the city.

"We are now seeing increasing numbers of travellers establishing links with Christchurch. There will soon be a critical mass of hotel beds, matched with international air capacity. This has given us the confidence to secure the site for a new home for our businesses in Canterbury."

The former United Service Hotel was built on the Cathedral Square site (indicated by blue shading) in 1884-85. Photo / Supplied

The Greenwood family has owned the property since at least the 1920s but has decided against developing the bare land itself.

Spokesperson John Greenwood says the family trust is delighted with the price and that such a respected national retailer is returning to Christchurch.

"Aotea's plans will bring life back to Cathedral Square and we're pleased the company sees such value in the property."

Originally known as the Morten Building, the site was bought by Richard Morten for 3950 pounds from the estate of Edward Gibbon Wakefield.

The United Service Hotel was built in 1884-85, and a fifth storey added in 1929. During its heyday, the hotel hosted Queen Elizabeth, leading European Heads of State and Royals, and Antarctica explorers Sir Ernest Shackleton and Sir Robert Falcon Scott. Famous violinist Jan Kubelik was another guest and George Bernard Shaw was interviewed there by reporters.

The building was demolished in January 1990, as was replaced by an office building housing the ANZ after the earthquakes.