Motel perfectly positioned for its market

This motel block on Great South Rd has 40 units and generates a turnover of about $600,000. Photo / Supplied

The Budget Travellers Inn, an established motel business on a corner site at 558 Great South Rd, Manukau, is being offered for sale as a freehold going concern by Colliers broker Roger Seavill with a deadline private treaty campaign calling for offers by Wednesday December 2.

"It's a solid operation with a 20-year trading history, strong repeat business and ideally situated for its modus operandi," Seavill says.

"The land, business and buildings are all included in the sale, which has been prompted by the vendor, Nandro Investments Limited, concentrating on other properties in its portfolio."

Built in 1988-89, the motel occupies a prominent 2530sq m site on the corner of Great South Rd and Pembroke St. With a 10.45m frontage on Great South Rd and 84.57m on Pembroke St, the complex provides 40 units of accommodation within five free-standing, two-storey chalets. Accessed off a central courtyard, the chalets are at the foot of the site with separate accommodation units on each level.

"The accommodation is provided through a mix of units, including rooms with shared common facilities, rooms with en suites, bunk rooms and paraplegic rooms," Seavill says. "In 2006-07 the owners invested significant capital expenditure into the business to maintain and refresh the motel complex."

The property includes a facilities block that has a reception area, kitchen, dining room, lounge and a guest laundry. An additional block includes a manager's two-bedroom accommodation unit and a garage. A covered walkway connects the manager's accommodation to the facilities block that has a combined area of 739.9sq m.

Seavill says the site is mainly laid out with cobble paved parking, with manoeuvring areas enabling vehicle access to each chalet and the amenity block.

"The Budget Travellers Inn has been operating for two decades and is listed as being of two star Qualmark standard. The motel business offers rooms from $60 for a single and $75 for a double, and up to $105 for a four-bed family room, and generates a turnover of about $600,000 per annum."

Seavill says that the motel's set up, chalet-style accommodation and attractive budget rates attract a number of touring groups. "Because the kitchen is set up to be used on a communal basis, and the motel provides accommodation at the budget end of the room rate market, it is ideal for visiting sports teams, school, church and music groups, as well as convention participants."

He says that the motel has succeeded over two decades partly through word of mouth, repeat business and its location close to a number of regional attractions and amenities.

"Surrounding developments comprise a mixture of commercial and residential housing, with the latter constructed during the 1950s and early 60s. Within the catchment is the3.5-star Camelot Arms at 525 Great South Rd and Silver Oaks, a 3.5-star hotel at 477 Great South Rd.

"The Budget Travellers Inn is well positioned to target a different sector of the market from the Camelot Arms or Silver Oaks so it has a good expectation for market share."

Seavill says the motel complex is strategically positioned being described by the Automobile Association website www.aatravel.co.nz as "ideally located close to Auckland Airport and 1.5km to Manukau Shopping Centre, restaurants, cinemas, tenpin bowling, greyhound racing and more, along with being only 15 minutes from downtown Auckland.

"With good repeat business and significant capital expenditure on the property relatively recently, this is the sort of property and business that would be a no-hassles addition for a chain operator," say Seavill.

The current owner operator of the business will meet the market price and is prepared to consider staying on as a tenant, citing the property's potential to provide a market rent of $212,500 per annum, plus GST.