A visitor accommodation development is planned for a prime location on Kaikoura's main street, following the purchase of the former Adelphi hotel site at 26 West End by a Christchurch-based property developer.

Savills North Canterbury & Marlborough property broker Rob Gibson negotiated the sale of the high-profile, 2000sq m site in July 2018 to Declan Foran, who is planning to develop ground floor retail space and two levels of managed apartments above.

The site has been vacant since the earthquake-damaged Adelphi Hotel, built in 1921, was demolished in mid-2017. It is the second major accommodation development to be planned for Kaikoura this year, following the announcement of a new Sudima hotel in June.

Foran has also purchased a 3000sq m parcel of land behind the Adelphi site, at 11, 13 and 17 Adelphi Tce, following a further deal brokered by Gibson on behalf of the owners of the three separate titles.


Gibson says the purchase of the sites means Foran can move ahead with development plans for the prime land and bring 36 planned new units into the supply-starved Kaikoura visitor accommodation market.

"Visitor accommodation supply in Kaikoura was severely reduced following the November 2016 earthquake. Visitor numbers are rising again following the re-opening of State Highway 1 and this is placing even more pressure on the limited number of rooms available."

Kaikoura has long been regarded as one of the South Island's top destinations, with 60 per cent of visitors to the South Island passing through the town, Gibson says.

"With the reopening of State Highway 1 at the end of last year, the Kaikoura tourism market is now well on its way to recovery."

Annual visitor spending in the Kaikoura district for the year to June 2018 was $97m, 47 per cent higher than the previous year, according to the Ministry of Business, Innovation and Employment (MBIE).

As well as bringing more visitor rooms to Kaikoura, the new development will also fill in a "big piece of the puzzle" which has been missing from the central Kaikoura commercial precinct ever since the historic Adelphi Hotel was demolished in the middle of last year.

"Following the earthquake, we lost some landmark buildings along West End as well as many of the smaller retail units, leaving several empty sites along what was a lively and buzzing retail and commercial strip," Gibson says.

"This new development, which will accommodate shops as well as badly-needed visitor beds, will help restore the fabric of the West End main street which is such a crucial part of the Kaikoura visitor experience."


The 36 accommodation units planned for the development, range from studios to 3-bedroom apartments. All the units will have mountain and sea views.

The apartments will be sold individually to investors, with management agreements enabling letting to short-term visitors as well as use by their owners.

Interest among property investors in Kaikoura has been increasing this year, with both locals and out of towners looking to buy, Gibson says.

"The residential market in Kaikoura is very short on stock because of huge outside interest. There is also significant interest in commercial property, with vacancy currently at zero on West End and buyers highly confident in the town's future following the reopening of State Highway 1."

Property buyers from around the South Island are predicting good future growth in Kaikoura, especially with land values offering excellent value compared with other tourism hot spots like Tekapo, Wanaka and Queenstown, he adds.

"Many property developers and local investors believe Kaikoura has the potential to rival the South Island's top tourism destinations – with the town centre rebuild well underway, the development of a new coastal cycle path, outdoor sports including skiing and surfing, as well as the town's many other famous attractions like whale watching."

Buyers keen to get in on the Kaikoura tourism scene are competing for the few available opportunities, including a new listing which Gibson has brought to the market overlooking the surf breaks at Mangamaunu, 15 minutes north of Kaikoura.

Surfwatch Cottages, at 1137 State Highway 1, is a private retreat set in 2ha of mature bush, with views of the Seaward Kaikoura Ranges and the Pacific Ocean. It includes five high-end tourist accommodation units and is well-placed to capture business from people travelling to the area to surf the famous Mangamaunu break, as well as cyclists using the new coastal cycleway which will pass the bottom of the property, he says.