In Queenstown a portfolio of four freehold retail units within large new development projects, has been placed on the market as tenanted investment properties.
Located in Queenstown itself, and immediately adjacent to Queenstown's international airport in Frankton's CBD, the properties in the portfolio are for sale as one combined parcel; or as individual properties; or in any combination of the four sites.
The four comprise:
• a 144sq m food service premises within the 131-unit Ramada Queenstown at 24 Frankton Rd, Queenstown – still under construction;
• a 214sq m street-level restaurant premises within the 54-unit Ramada Remarkables Park at 24 Hawthorne Drive, Frankton – completed and now operational;
• a 136sq m street-level retail site also within Ramada Remarkables Park housing a physiotherapist's suite, and a car-hire business's offices; and
• a 147sq m retail foodservice premises within the 55-unit Wyndham Garden at 32 Red Oaks Drive in Frankton – also completed and now operating.
The construction of the Ramada/Wyndham complexes in Queenstown has/is being undertaken by privately-owned New Zealand construction company Safari Group (NZ) Ltd which has a long track record of successfully developing hotel mixed-use properties throughout the country.
The four Queenstown properties are being marketed for sale through a deadline private treaty process being jointly managed by Bayleys Auckland and Bayleys Queenstown, with offers closing at 4pm on Thursday August 8.
Stephen Scott of Bayleys Auckland says the permutation of properties within the portfolio, which is featured in Bayleys' latest Total Property portfolio magazine, offers diversity and scale to potential investors.
At the Ramada Queenstown location, the freehold unit-titled street-level premises houses Redwoods restaurant which is on a 10-year lease through to 2027 with three further four-year rights of renewal paying a net lease of $157,000 plus GST per annum.
Scott says Redwoods intends operating seven days a week, serving casual dining Euro-Kiwi food to both local customers and hotel guests. It's profile includes an extensive al-fresco dining area.
The Ramada Queenstown consists of freehold unit-titled premium furnished apartment-style rooms, along with a gymnasium, conference facilities and a restaurant at its CBD site. The building is due for completion by September this year.
Over at the Ramada Remarkables Park, three very different tenancies occupy the two commercial units offered for sale, Scott says.
The first, a ground-level property, hosts the family-run cafe Frank's Eatery specialising in breakfast and lunch service. The business opened in 2017 and is on a seven-year lease through to 2024 with three further four-year rights of renewal currently paying a net lease of $129,306 plus GST per annum.
Also on the ground floor of the Ramada Remarkables Park, two tenancies are contained within a single 136sq m unit. Queenstown Physiotherapy is on a six-year lease through to 2023 with two further rights of renewal. The Ramada Remarkables clinic is one of four locations Queenstown Physiotherapy operates from in the region – with the other sites in Queenstown and Arrowtown.
The neighbouring tenancy within the unit is occupied by insurance, investment and mortgage broking firm RMA Financial also on a six-year sub-lease through to 2023. Combined, the two tenancies earn $85,467 plus GST per annum.
The boutique Ramada Remarkables Park encompasses 54 rooms units with 56 car parks and five retail units on the ground floor. National big-box retailing tenants within the wider Remarkables Park Town Centre include The Warehouse, Noel Leeming, Harvey Norman and New World.
Moving to Wyndham Garden, the 147sq m retail corner unit is leased to Frank's Pantry – a sister operation to Frank's Eatery. Frank's Pantry opened last year and is on an eight-year lease through to 2026 with three further four-year rights of renewal paying a net annual lease of $111,850 plus GST.
Wyndham Garden - franchised by global chain Wyndham Hotel Group – is located two minutes' drive from Queenstown Airport and 12 minutes' drive from Queenstown's town centre. The development comprises 75 serviced apartment units, 55 residential apartments, and eight retail and office units; which anchor the Remarkables Park Town Centre which has a wide range of neighbourhood amenity shops, businesses and food and beverage outlets.
Stacy Coburn of Bayleys Queenstown says the substantial investment by Safari Group in creating new commercial accommodation and supporting retail locations within the Wakatipu Basin is at the bow-wave of Queenstown's hotel sector – which had been "fizzing" for some nine years.
"Healthy financial returns generated by Queenstown's hotels have spurred major investment programmes in the sector over the foreseeable future, with the Ramada and Wyndham properties coming onto the market at the head of the pack," Coburn says.
"Sixteen new hotels are on the drawing board to be built in the Lake Wakatipu area. If all the mooted hotels came to fruition, an additional 2824 rooms will be added to Queenstown's inventory by 2025.
"Among them is another Safari Group (NZ) Ltd property – the $90 million Ramada Kawerau River property comprising 87 hotel unit and 97 residential apartments. Construction there is on track to begin this month."
Coburn says that statistics collated from a range of Government departments and tourism industry bodies all show the past nine years have been a prosperous era for the Queenstown region's accommodation sector, and wider tourism industry.
Headlining the sector's prosperity, The Ministry of Business Innovation and Employment's Regional Tourism Estimates for the year ending January 31, 2019, showed that both domestic and international tourism spend in Queenstown reached new peaks – with international guests splashing out $1.5 billion within the local Queenstown economy, and domestic holidaymakers handing over $837 million in the region.
The combined tourism spend figure of nearly $2.34 billion is more than twice the 2010 spent of $1 billion.
Statistics New Zealand's most recent Accommodation Survey tracked that there were 3.69m guest nights in Queenstown for the year ending January 31, 2019 – up 3.1 per cent from the same period in 2018. The bulk of Queenstown's commercial accommodation providers are in the four and five-star categories.
The Accommodation Survey report noted: "New Zealand's tourism sector has boomed over recent years as overseas visitor numbers have increased sharply. Queenstown with its international reputation as an adventure tourism centre has been one of the major beneficiaries of increased spending."
Tourism Industry Association figures show that across both categories of four and
five-star rated properties in Queenstown, annual occupancy rates for the year to April 30, 2019, sat at 81.3 per cent – substantially up from the 65.6 per cent benchmark recorded in 2010. The association reported that in the peak summer months of January and February, hotel occupancy rates sat at around 93 per cent.
Concurrently, the association's data also showed that average nightly room rates for hotels in the region rose from $155 in the year ending March 31, 2015, to $249 for the year ending March 31, 2019. At the same time, revenue per available room increased from $116 to $203.