835 Frankton Road - Information Memorandum

Introduction

Colliers have been appointed (as sole agents) to market for sale

835 Frankton Road, Queenstown.

This property is being offered For Sale by Auction, to be held on Wednesday, 21 June 2023 at 11am (unless sold prior).

For further information about the sales process please see page 20. Auction to be held at: Colliers, Top Floor, 10 Athol Street, Queenstown

This information Memorandum provides preliminary information to assist interested parties with their assessment of the property. Further information is available via an online data room which can be accessed upon registration.

www.colliersotago.co.nz/67023827

Data room documents available:

• Information Memorandum

• Certificates of Title and Interests

• Outgoing Schedule

• Lease Documentation

• Land Information Memorandum

• Auction documents

• Seismic Report

• Builders Report

All enquiries, requests for information and arrangements to undertake inspections in relation to this opportunity are to be directed to the listing agents below.

Rory O’Donnell

+64 27 445 3982

rory.odonnell@colliers.com

Mark Simpson

+64 27 490 6394

mark.simpson@colliers.com

Executive Summary

ADDRESS 835 Frankton Road, Queenstown

DESCRIPTION

835 Frankton Road comprises a high profile, fully leased commercial investment property, strategically located on a 693m² corner site at the entrance to the newly developed Queenstown Marina. Under the Proposed District Plan the property is to be rezoned as Business Mix Use providing a variety of future development options.

TENURE Freehold (fee simple)

LEGAL DESCRIPTION LOT 1 DP 301511

CERTIFICATE OF TITLE 6360

AREA Building Floor Area Land Area

(more or less)

LOCAL AUTHORITY Queenstown Lakes District Council (QLDC)

ZONING

Business Mixed Use under the QLDC Proposed District Plan. Currently zoned Low Density Residential with existing use rights for its current use under the Operative District Plan.

• Queenstown Upholstery – current lease term expiring 31/12/2027

TENANTS

• Queenstown Tyres – current lease term expiring 29/2/2025

RENT INCOME Contract Rent: $90,797.28 p.a. plus GST + Outgoings

RATEABLE VALUE

SALES PROCESS

For Sale by Auction at Colliers on 11am, Wednesday 21 June 2023 (unless sold prior)

Investment Highlights

HIGH PROFILE

High Profile location on Strategic corner

VALUE ADD

Value add benefits from the ongoing redevelopment of the Marina Area

HOLDING INCOME DEVELOPMENT OPTIONS

Proposed rezoning to Business Mixed Use allows for more comprehensive development in the future

Good holding income until redevelopment occurs

LOCATION

835 Frankton Road is located on a high profile 693m² corner site strategically positioned at the entrance to the newly developed Queenstown Marina. The property enjoys frontage to Frankton Road as well as Sugar Lane, the only access into the Marina Area.

Frankton Road is the key commuting arterial route between Queenstown’s CBD, Frankton, and the International Airport. A full range of amenities are available in the Queenstown Town Centre located 6km to the west and the growing Frankton retail hub located 3 km to the east, which includes Five Mile / Queenstown Central and The Remarkables Park shopping centres.

Surrounding development in the immediate area comprises predominantly other mixed use commercial activities including marine based tourism operators, automotive, hospitality, professional services, Z service station and visitor accommodation. Outside of this small commercial precinct the predominant use is residential.

As one of the most popular tourist destinations in New Zealand, Queenstown and the surrounding southern lakes has over 2,700,000 visitors (pre-covid) each year, with over half arriving through the Queenstown International Airport. The Queenstown urban population is currently estimated at 35,000, however the average day population (Pre Covid) accounting for the tourist is estimated at over 40,000.

The Property Zoning

The property comprises a predominantly single level industrial building with a total gross floor area of circa 424m² providing a combination of workshop, office and yard space. It is currently occupied under 2 tenancies with Queenstown Upholstery and Queenstown Tyres.

Originally constructed in circa 1995 the property has undergone further development in 2002 with an extension to the east end of the building to provide additional office space. In 2005 the rear wall of the building was altered to increase the internal area of the two workshops.

Construction comprises predominantly of a concrete floor slab with a combination of steel portal and timber framed walls clad in a mix of corrugated steel and plywood cladding. The roof structure includes a curved roof element clad in corrugated steel with some area of clearlite roofing to improve natural lighting into the tenancies. Internal linings are a mix of plywood and gib-board with basic amenities to each of the tenancies.

Under the Proposed District Plan 835 Frankton Road has been rezoned from Low Density Residential to Business Mixed Use. The new Proposed District Plan is now beyond challenge and as such the new Business Mixed Use Zone is the only relevant planning document for the property to be assessed on.

The intention of this zone is to provide for complementary commercial, business, retail and residential uses that supplement the activities and services provided by town centres. Higher density living opportunities close to employment and recreational activities are also enabled. Significantly greater building heights are enabled in the business mixed use Zone in Queenstown, provided that high quality urban design outcomes are achieved.

The development of land at Frankton Marina (Sugar Lane) provides for a range of activities, while restricting the scale of office and retail activities so that the function and viability of the Queenstown Town Centre and Frankton commercial area are not undermined, to achieve a high quality environment that is compatible with its location adjacent to Frankton Marina, Lake Wakatipu and Frankton Road.

Some of the key Zone and Site Standards include:

• Maximum building coverage 75%

• Maximum building height 15m

• Following limits on office and retail activities at Frankton Marina apply:

• 1000m² GFA for retail activities and 300m² GFA for individual retail tenancies

• 1000m² GFA for office activities and 200m² GFA for individual office tenancies

Note:

• Retail limits do not apply to marine retail activities.

• It is the responsibility of interested parties to obtain their own independent advice on planning, zone and building relates activities for the property.

Tenancy Schedule

CPI rent reviews through the current term and the further term if renewed, except the reviews in 2024 and 2028 which are market reviews.

CPI rent reviews through the current term and the further term if renewed, except the review in 2024 which is a market review.

$90,797.28 $90,797.28 p.a plus GST and OPEX

Queenstown’s Market Summary

As Queenstown recovers from the Covid pandemic tourism and construction are again continuing to underpin business growth and confidence for occupiers of industrial and commercial property. There remains a critical shortage of land available for industrial development. Currently, industrial and commercial property has the lowest vacancy rate on record.

A shortage of industrial property for lease, and the high cost of construction of new buildings, are resulting in steady rent increases.

Long term the ongoing population growth projections will result in continued demand for commercial and industrial space that will continue to put pressure on rentals to rise.

The more recent inflation and interest rate pressure is beginning to put some pressure on investment yields, however this is yet to have any material impact on values.

Prime property is continuing to transact at stable yields.

Certificate of Title

RECORD OF TITLE UNDER LAND TRANSFER ACT 2017 FREEHOLD Search Copy

Identifier 6360

Land Registration District Otago

Date Issued 03 August 2001

Prior References

OT17C/484

Estate Fee Simple Area 693 square metres more or less

Legal Description Lot 1 Deposited Plan 301511

Registered Owners

D S & E E Properties Limited

Interests

Appurtenant hereto is a right of way, right to convey water, power and telecommunications and drain sewage and water created by Transfer 5323840.4 - 26.8.2002 at 9:00 am

The easements created by Transfer 5323840.4 are subject to Section 243 (a) Resource Management Act 1991

Subject to a right to drain sewage and water in gross over part marked X on DP 301511 in favour of Queenstown Lakes District Council created by Transfer 5323840.5 - 26.8.2002 at 9:00 am

The easement created by Transfer 5323840.5 is subject to Section 243 (a) Resource Management Act 1991

Auction Process

Summary of important things to know

• Buyers should register their interest with the agent and ask to be informed if another buyer makes an offer before the auction date.

• Auction bids are open so you know what everyone else is bidding . If you haven’t been to an auction before, it’s a good idea to attend o ne as a spectator so you can see how they work.

• If you win an auction, you are committed to purchase the property. You must pay the purchase deposit on the auction day.

• The auctioneer will not reveal the reserve price.

Please note:

• Auctions are unconditional, so you need to learn as much as you can about the property. Ask your lawyer or conveyancer to review and help you understand any information you get before the auction.

• If you want to bid for a property at an auction, your first step is to let the agent selling the property know that you are interested. The ag ent will have legal documents for you and your lawyer or conveyancer to revie w and sign. These documents include the auction rules and the sale an d purchase agreement.

• Because auctions are unconditional, you need to confirm your fina nce before you attend the auction

• If you want to change anything in the agreement or put any cond itions on the sale, you need to arrange it before the auction by using a document called a variation – your agent will be able to provide this fo r you.

Registering your interest

If you are interested in submitting an offer for the property, p lease formally register your interest with one of the Agents.

The Auction is to be held on Wednesday, 21 June 2023 at 11am (unless sold prior).

Due Diligence

To assist in the assessment of this offering, comprehensive due diligence information is available via a secure documents link. For access to all documents you will be required to register in the dataroom.

• Information Memorandum

• Certificates of Title and Interests

• Outgoing Schedule

• Lease Documentation

• Land Information Memorandum

• Auction documents

• Seismic Report

• Builders Report

All enquiries, requests for information and arrangements for site inspections are to be directed to the Colliers sole agents:

Queenstown Broker, Commercial rory.odonnell@colliers.com

Mobile: +64 27 445 3982

Queenstown Director, Commercial

mark.simpson@colliers.com

Mobile: +64 27 490 6394

Rory O’Donnell

Mark Simpson

DISCLAIMER: This Information Memorandum has been prepared solely for information purposes in order to assist interested parties in making an initial evaluation of the property and does not constitute advice nor purport to contain all of the information that a prospective purchaser may require. In all cases interested parties must conduct their own investigation and analysis of the property and the data set out in this Information Memorandum to satisfy themselves in all respects and not rely on the information in this Information Memorandum to make their purchasing decision. This Information Memorandum has been prepared in good faith and with due care by Colliers, but neither Colliers nor the Vendor accept responsibility hereunder for the accuracy of any part of the information contained in this Information Memorandum. Therefore the recipient/s of this Information Memorandum to the extent that they rely on the information contained herein do so entirely at their own risk. The Vendor and Colliers NZ Limited (and its brokers) expressly disclaim all liability for representations, express or implied, contained in, or for omissions from, this Information Memorandum or any other written or oral communication given to any prospective purchaser in the course of their evaluation and/or offer. This Information Memorandum does not constitute an offer for sale or purchase or otherwise.

Please be aware that Mortgagee Sales can present more risk to purchasers, we recommend you take advice from your lawyer in this respect.