Restaurants and gift shop ready and waiting for development benefits.
Three retail properties in Havelock North, Hawkes Bay, that are likely to benefit substantially from the construction of a new five-star hotel across the road, are for sale.
The three-site block at 22-26 Havelock Rd is occupied by Chinese and Indian restaurants and a gift and stationery shop.
Last year Lowmac Properties received resource consent from the Hastings District Council for a $20 million boutique hotel and retail building in the town centre on a site where the Happy Tav' pub was formerly located, bordering Havelock Rd and Te Aute Rd.
Lowmac is seeking a chain or private hotel operator for the planned 57-room Havelock North hotel and conference centre before submitting a building consent application to the council. The retail block facing the hotel development land and containing the Curry India and Happy Dragon eateries, and the Gifts Galore shop, is being marketed for sale by negotiation by Daniel Moffitt of Bayleys Havelock North.
The Happy Dragon restaurant at 22 Havelock Rd has a lease running through to 2016 with a final lease expiry of 2026. Gifts Galore at No24 has a current lease running through to 2015 with a final potential lease expiry of 2024. Curry India at No26 has a lease expiring this month but with a final potential expiry of 2018 if rights of renewal are exercised. Combined, the three tenancies generate a net rental of $95,000 a year.
Moffitt says the buildings sit on a 470sq m freehold site that is 8C zoned under the Hastings District Plan with 18m of frontage on Havelock Rd.
"Land and buildings in the Havelock North CBD rarely comes onto the market which is why the Happy Tav' location over the road was snapped up quite some years ago by developers who could see the long-term potential for the town as a tourist destination," Moffitt says.
"The intervening years have seen the planning approvals process move through its required chain, with the next step being the partnership of a hotel operator, and ultimately the building's construction.
"With much of the town owned by Hawke's Bay entities, many of whom know each other through both their commercial real estate and social networks, any time land and building come up for sale it's the veritable 'talk of the town'. As such, many of the retail outlets that do come up for sale, change hands quietly off market.
"For example, since the middle of last year, all six commercial and industrial properties sold in Havelock North were through sales with no open marketing. However, by taking this block to the market through to an open-sale process it ensures a wide buyer audience."
Moffit says the development of the 4300sq m hotel has been welcomed by local organisations, including the Havelock North Business Association and Hawke's Bay Tourism.
Both business bodies forecast the hotel will bring more corporate and leisure travellers and predict it will generate a positive spend impact on town centre businesses.
Moffitt says that guests, especially those staying for several nights, often choose to dine at nearby restaurants.
"All business travellers know how tedious and lonely it can be, either ordering in food to the room or sitting alone in a hotel restaurant, so they frequently seek the ambience of nearby eating and drinking venues where there is the chance to meet and mingle with locals.
"In this regard, Curry India and Happy Dragon will be right on the doorstep of the new hotel to pick up on that guest traffic. With a range of Hawke's Bay-orientated products, the Gifts Galore shop is also well positioned to attract guests looking to purchase local presents to take home.
"The potential for a pending increase in foot traffic and consequently greater turnover will give an underlying confidence to the operators of these three retail premises, which in turn underpins their long term investment value."
What's on offer?
The property: Three-outlet Hawkes Bay retail block.
Where: 22-26 Havelock Rd, Havelock North.
Agency: Bayleys Havelock North.
Method of sale: By negotiation.
Features: Leased by two restaurants and a gift shop.
• Generates annual net rent of $95,000.
• Directly opposite planned five-star hotel.