There’s still healthy demand for good investment stock in the South Island – and Queenstown specifically – according to Stephen Scott of Bayleys’ national investment sales team.
“Queenstown retains its status as the jewel in New Zealand’s tourism crown and recently ranked 25th of the 100 most-loved destinations in the world on the Tourism Sentiment Index, which measures online content and conversations about thousands of global destinations.
“It is the only New Zealand destination to make that list and with so many Kiwis having enduring connections to the town, it’s a sought-after investment location and rarely does commercial stock make it to the open market given the tightly-held nature of Queenstown property”.
Scott is marketing a unit-titled retail space within the recently-built Ramada Queenstown Central hotel in Frankton Road at the gateway to the resort town’s CBD, with colleague Luke Baird of Bayleys Frankton.
The multi-level Ramada Queenstown Central was developed by privately-owned New Zealand family business Safari Group and opened at the end of 2019 with 131 hotel units and two penthouse apartments.
It is the ground floor retail unit occupied by Coco Cabana by Franks, the hotel’s on-site restaurant, that has been placed on the market for sale by deadline private treaty closing Thursday 9th March.
Unit 26, 24 Frankton Road is a high-quality 292sqm unit at 100 percent new building standard returning net annual income of $153,000 plus GST with Coco Cabana by Franks, a Franks Hospitality Group establishment, recently exercising its right of renewal early with more than eight years now to run on the lease.
There are also a further two, four-year rights of renewal remaining on the lease.
“It’s the hotel’s only food and beverage offering and as such, is an integral part of the Ramada Queenstown Central’s operational model, “ explained Scott.
”Hotel guests expect an in-house restaurant offering, and Coco by Franks operates a breakfast/morning service seven days a week and opens in the evenings Thursday through to Sunday for both guests and the public.”
Queenstown-based Baird said the family-owned local Franks Hospitality Group has five other establishments around Queenstown, with several of these within Ramada or Wyndham-branded hotels, and the lease on the subject unit for sale is underpinned by Frankton Hotel Limited, a Safari Group-related company.
“The tenant has exercised a lease renewal to 2031, and that’s unusual for the town – particularly given the past few years as restrictions and labour shortages took a toll on operators in the tourist sector,” said Baird.
“However, the strong head lease covenant, minimal input required by an owner, and the proven Ramada hotel brand that has proactively expanded into Queenstown will provide important additional layers of certainty for a buyer as some sense of normality returns to the town.
“This unit-titled offering is likely to have appeal for an out-of-town investor who spends time in Queenstown and wants a bricks-and-mortar investment that they can drive past and it’s also an accessible proposition for an entry-level investor wanting to jumpstart a commercial real estate portfolio.”
The property is well designed and laid out with a commercial kitchen, welcoming front-of-house space and good indoor-outdoor flow to generous decking with covered and open areas for dining.
The hotel is highly visible to vehicle and pedestrian traffic as Frankton Road is the main arterial linking CBD with Frankton, and is just a few minutes’ walk from the CBD and the lakefront precinct.