73 Brownston Street, Wanaka - INFORMATION MEMORANDUM

Brownston Street Wanaka Prime Wanaka Tourism | Commercial Opportunity August 2021

Introduction A rare opportunity to acquire a substantial 3 level commercial building in central Wanaka.

73 Brownston Street comprises the former Base building developed in 2008, and currently configured as a 49 room hostel with 240 beds, with a floor area of 2,130m² on a 1,012m² site.

In addition the premises contains the former Mint Bar and ground floor retail. The building is being offered with vacant possession providing the new owner with a blank canvas to develop the building for a variety of uses including, long/short term residential, conversion to a hotel (concept plans available) or commercial retail or offices. The owner will also consider proposals to lease all or parts of the buildings.

Property markets within Wanaka remain active across all market sectors underpinned by the continuing population growth, strong construction industry and the domestic tourism market. Wanaka’s commercial property market is tightly held, with strong rental growth over a sustained period of time.

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prime cental location

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substantial building on 1,012m² site

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extensive existing fitout

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suitable for a wide range of residential/tourism/commercial uses

It is predicted that tourism will remain the primary economic driver for the Wanaka region post Covid. Pre Covid figures up until the YE April 2019 saw a total visitor spend of $M573, a number which has doubled over the prior 6 years.

More recently Wanaka has benefited by strong population growth and a significant portion of the increase in domestic tourism over the last year.

Date room Documents: •

Architects concepts

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Floor plans

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Lake Wanaka Tourism Strategy

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Destination Queenstown visitor mapping 2020-24

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Information Memorandum

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LIM

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Title

The property is offered For Sale By Deadline Private Treaty closing 4pm Thursday 23 September 2021 (unless sold prior).

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location indicative only

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Contents

location indicative only

Executive Summary

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Key Investment Highlights

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Location

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Title & Tenure

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Property Description

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Current Floor Plans

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Wanaka Accommodation Market

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Wanaka Commercial Market

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New Zealand Market

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Executive Summary

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ADDRESS:

73 Brownston Street, Wanaka

OWNER:

Otago Land Group Limited

TENURE:

Freehold

LEGAL DESCRIPTION:

Section 11 Block IV Town of Pembroke

CERTIFICATE OF TITLE REF:

OT261/191

SITE AREA:

1012m² (more or less)

ZONED:

Wanaka Town Centre

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Key Investment Highlights

This Wanaka CBD building is located next to the New World supermarket short the

and

walking lakefront

amenities.

within

distance and

Purpose

all built

of CBD as

commercial accommodation.

The propert has the potential to be utilised / developed for a range

of

residential,

and commercial uses.

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tourism

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Location

Wanaka Wanaka is recognised as an international quality, growing year round resort, with the advantages of a township, encircled by the lake and mountain ranges.

The area has a wide range of adventures, including canyoning skydiving paragliding; outstanding landscape and nature for walking, hiking, mountain climbing; cycling on an extensive trail network and bike parks; water-based activities including boating, sailing, kayaking, swimming, jet boating; and winter sports based around Treble Cone, Cardrona and Snow Farm and Mount Soho.

Growing local and visitor populations has resulted in a diverse range of restaurants, cafes and breweries.

Wanaka airport currently caters for flightseeing, and helicopter operations with limited air-connection to Christchurch. Long term plans are to expand to a jet capacity airport.

Queenstown international airport is 80km away and recently Christchurch airport announced the purchase of land at nearby Tarras to develop a long haul jet capacity airport.

Property Location The property is situated on the north-western side of Brownston Street Wanaka, on the southern periphery of the town centre and only 250m from the lakefront.

Adjoining is the central Wanaka New World supermarket and carparking and a range of small to medium range of commercial buildings providing a good retail offering. Other tourism accommodation business nearby include the YMCA Hostel, Aspiring Lodge Motel and Matterhorn Lodge.

There is ample parking available in surrounding streets and the nearby Pembroke Park public carpark.

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Title & Tenure

Site Details The rectangular shaped site has a frontage of 20m to Brownston Street and depth of 50m.

The building has been built up to the Brownston Street frontage and set back at the rear corner has been utilized as an outside bar area.

The New World car park borders the East and North sides of the building.

Zoning Zoning of the property under the Queenstown-Lakes District Council Operative District scheme is Wanaka Town Centre.

This Zone under the prosed district plans provides predominantly for commercial and visitor accommodation activities.

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Building Construction The building was purpose built as a hostel and contained 240 backpacker beds in 49 rooms, plus a bar/night club, first floor reception area and ground floor retail areas.

Estimated floor area totals 2130m².

General construction includes reinforced concrete foundations and floors to the lower level, reinforced concrete block structural walls with steel columns and beams plus masonry tilt panels, upper levels in suspended concrete rib and timber infill flooring while exterior cladding is a mixture of schist stone, plaster and cedar weatherboards and exposed aggregate pre-cast panels.

Joinery is in powder coated double glazed aluminium and the roof structure is supported by steel portal frames including some dormers with cladding in Eurotray.

Current internal walls are predominantly plasterboard lined with paint finishes.

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Property Description Improvements comprise a three-level

by Parker Warburton of Wanaka.

building

completed

in

2008,

designed

Building Layout

Business Opportunities

At the ground floor frontage there is circa 311sqm of nett lettable retail area, including common area, dedicated entry, and lift lobby to the first floor and a substantial fitted out bar area including outside space.

Current ground floor rentals in this precinct range from $300-400psq depending on areas.

At first floor level there is a large reception area, 23-bedroom s,3 with ensuites, plus common bathroom facilities.

At second floor level there are a further 26 rooms, each with ensuites plus common rooms and communal kitchen.

Included in the building is a gas fired hot water and heating system. The property has a WOF for the current use as a hostel.

All furniture, bedding, plant and equipment on the premises is included.

Previously the whole building apart from the retail areas was leased to an international hostel operator at $500,000panum plus OPEX. The former Mint Bar can also be leased separately.

In addition, there is strong demand currently for employee housing with rates of between $200-300 per week gross being achieved per room.

Another opportunity is for the conversion of the upper floor to office suites with rates of $200-250 psm being achieved.

The current owner has also progressed plans for conversion of the property into a 50 suites 4* hotel property including reception/café and day spa at ground floor. These are available to view by qualified parties.

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Current Floor Plans

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Wanaka Accommodation Market

Analysis provided by MBIE indicate Wanaka had 50 accommodation properties (with over 6 units) as at January 2021 comprised of the following:

• Motels and apartments with 6-20 units – 17 • Motels and apartments over 20 units – 7 • Lodges & boutique accommodation – 8 • Backpackers – 8 • Holiday parks & campgrounds – 7 • Hotels – 3

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Wanaka Commercial Market Wanaka commercial property traditionally has investment yields lower than commercial property located in other parts of New Zealand. This is due to commercial property being tightly held, with strong rental growth over a sustained period of time, and demand outweighing supply in terms of the availability of prime retail space. This low yield trend also exists outside of Wanaka’s CBD, albeit at slightly higher yields, but low in terms of national comparison. Wanaka is a vibrant holiday destination town with strong growth factors and accordingly an area attractive for long term investment.

In Wanaka’s CBD there have been relatively few sales in recent years. There appears to be good demand for investment property at all quantum levels. The most recent sales being 43 Helwick Street which sold at auction in November 2020 for a market yield of approximately 2.95% reflecting investors expectation of strong future growth fundamentals for Wanaka’s CBD along with further development potential and the entry price point in the town centre for this property.

The White House Restaurant on the corner of Dunmore and Dungarvon Street sold off market late 2019.

Property markets within Wanaka remain active across all market sectors, under pinned by continuing population growth, the strong construction industry and the domestic tourism market. This positive growth has led to a strong performance of supporting industries.

Prime retail rentals for space within the CBD core has been strong with ongoing rental growth at review and renewal until recent events related to COVID-19 although the rental market now appears to be stabilising at rental levels similar to that prior to the COVID-19 pandemic. There is currently limited vacancy. We are aware of instances in the past where tenants wishing to enter the market have paid key money to sitting tenants to secure well located sites.

Larger tenants entering the market will find a lack of larger floor plates available and with no further building currently taking place in the CBD, this trend looks set to continue.

Secondary retail rentals for space on the fringe of the CBD have been achieving rental increases on review and renewal albeit at a lower level in comparison to the prime CBD. Rental levels for good quality offices have also been increasing until recent events related to COVID-19 although appears to stabilising at levels similar to that prior to the pandemic. There is limited availability of premium office space within the Wanaka CBD at present.

New Zealand Tourism The 2019-20 year was a peak period for both New Zealand and the Queenstown Lakes region which includes Lake Wanaka.

New Zealand received 3.9 million visitors for the 2019 year up 2.66% on the previous year and 8.43% over the last 5 years.

A Strategy document prepared by Lake Wanaka Tourism showed the dramatic growth in visitor spend over the 2015-2019 period, to $M573 while guest nights showed comparable growth.

Obviously, the combined effects of Covid -19 and the closure of our borders up until early this year has had a significant impact on the tourism industry.

Lake Wanaka Tourism and Destination Queenstown have jointly published and updated a visitor demand mapping tool which predicts a return to pre covid levels by 2023-24.

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Monthly Total Guest Nights Wanaka

Monthly Regional Tourism Estimates YE April 2019

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Top floor, 10 Athol Street, Queenstown Monday - Friday: 9am - 5pm colliersotago.co.nz

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