Brokers say a substantial site for sale in the Tauranga CBD is ripe for a Mixed-Use re-development, possibly as retail space, offices, apartments or even a hotel tower.
Bayleys Tauranga agents Brendon Bradley and Lynn Bradley says the freehold property, presently the site of Durham Motor Inn at 60 Harington St, has useful City Centre zoning which allows for construction of a building up to 49m (about 12 storeys) high.
"It's a prized location, directly opposite Tauranga Domain, fronting onto Cameron Rd and bounded by Harington, Durham and Hamilton Streets," says Brendon Bradley.
The rectangular land holding of 2755sq m, featured in Bayleys latest Total Property Portfolio magazine, is also home to a separate 148sq m commercial building — one previously occupied by a specialist recruitment and labour hire agency.
However, since the management lease for Durham Motor Inn expires in July, the property — now being marketed for sale by an international tender process, closing on April 5 — is a clearly strong prospect for re-development, says Bradley.
"The city centre zoning would allow for numerous future development opportunities, while the existing commercial premises could deliver holding income over any intervening period," he says.
"A new owner could continue the Durham's operations as a business investment long-term, or offer a short-to-mid-term management contract to an experienced accommodation operator, while plans and consents are obtained for a new project.
"Under the city centre planning configuration, options exist for developing of an apartment block purely for owner/occupier residency; or for the establishment of an apartment-style hotel tower, with some owner/occupancy of units and others leased back to a hotel management pool; or for the construction of a conventional four-five-star hotel, which could also include retail and office floor options in the designs," Bradley says.
He points to a nearby precedent for a "leaseback unit entity", in the shape of the neighbouring Kingsview apartment block, which is directly over the road on Durham St.
This features a mix of owner/occupier tenants and a number of units operated under the Quest-on-Durham hotel brand as serviced apartments.
"Hotel development in Tauranga city-fringe sites has been mooted for many years and the demand exists for a nationally-branded Four-to-Five Star hotel operator to set up in Tauranga," says Bradley.
"Also, it isn't beyond the realms of possibility that a retirement village operator could build a boutique Central City, high-end, assisted-living retirement complex on the site, especially given the popularity of Tauranga and the Bay of Plenty for retirees."
Bradley says there is potential for residences. As local examples of this, he cites the proposed Craigs Investment Tower redevelopment (2 Devonport Rd); and the Farmers redevelopment (cnr Devonport Rd and Elizabeth St); both of which both include apartment living.
"So it's quite clear that central-city living is coming of age in Tauranga CBD," Bradley says.
Lynn Bradley says the southern end of Durham St is set to form a vibrant part of the city — with education at its core and including an estimated $6m streetscape upgrade.
"This property may provide an opportunity to capitalise on this educational sector growth with potential for student accommodation and related facilities in the future."
She notes that under its current use configuration, the motor lodge operations are accessed from 60 Harington St.
However, given the four road frontages, large-scale development of the site could open up additional vehicular access points from Durham St, Hamilton St or Cameron Rd.
Durham Motor Inn Tauranga is configured into 20 spacious self-contained studio and one-bedroom units and has been operating in the commercial accommodation sector for 25 years.
"In addition, the now vacant commercial space on the corner of Hamilton St and Cameron Rd has also been generating an independent annual rental revenue stream," Bradley says.
"Tauranga City Council has been proactive in encouraging investment in the city centre, and has a credible track record of working with architects and developers to ensure that the vibrancy factor is both planned for and brought to fruition."
Imaginative development of the site would suit the council's philosophy, as the land is close to the 'Heart of the City' redevelopment programme, which includes a new civic administration building and surrounding open space.
"Development of the Harington St site would complement the council's drive to attract investment, and ultimately people, into the heart of the Bay," says Bradley.
"Astute investors and developers will recognise the opportunity to reap the rewards of the current and proposed CBD redevelopment that is revitalising the Tauranga City Centre. Seldom does a commercial block of this calibre come to the Tauranga market in such a superb location."