5 Mile property goes up for mortgagee sale

Media Release
Date 19.2.2008

5 Mile property goes up for mortgagee sale

One of the biggest and most publicised land development sites available in New Zealand has been put up for mortgagee sale.

The 5 Mile development at Frankton Flats on the outskirts of Queenstown is a 31-hectare site that was originally envisaged as a mixed use precinct of commercial, retail and light industrial buildings.

Adjacent to Queenstown international airport, the land was bought by its current owners in 2002. When first mooted, it was proposed that the 5 Mile Development would accommodate 10,000 people and include a shopping centre complex, and the project was expected to be worth NZ$2 billion on completion.

The mortgagee sale of 5 Mile is being marketed by an international tender process with a deadline of March 12, 2009. Bayleys Real Estate principal John Bayley is leading the sale, assisted by Bayleys Queenstown owner David Murray and special projects manager Barry Robertson.

Mr Bayley said that he was expecting significant interest in the sale, from both New Zealand and overseas.

“This is a world-class site in an internationally renowned tourist destination. It’s the only remaining flat land development property of any size in the Queenstown Basin, with commercial potential and state highway frontage, and that’s what makes it unique,” Mr Bayley said.

Mr Bayley said initial excavations had begun on the Stage One site of the property, which would have comprised:
• 30,000 square metres of commercial development
• Student and workers' accommodation
• Budget travellers' accommodation
• Apartments and educational facilities
• A 4,000 square metre supermarket
• Large format sports, appliance and furniture stores
• Fashion stores
• Bars and restaurants
• Underground parking
• An on-site education campus encompassing several education providers and tertiary institutions

“This gives a good indication of the size and potential of the land,” he said.

Investment property in Queenstown tends to be tightly held - with few investment opportunities being brought to market. Due to the topography of Queenstown, suitable land for business and industrial development is in short supply and most development interest is centred on Frankton Flats.

The Queenstown Lakes District Council has identified that by 2021 there will be a severe shortage of industrial land, with an additional 54 hectares required by then to meet business needs. The report further highlighted that the lack of available land would become a hindrance on economic growth.

“In this context, access to and ownership of the strategically placed 5 Mile development site offers the potential for significant value appreciation and increasing returns over the coming years,” said Mr Bayley.

“We are consequently expecting interest from investors everywhere, and will be focusing a large part of our marketing efforts overseas – particularly in Australia, Asia and the Middle East. This will definitely be helped by the current attractiveness of the New Zealand dollar.”

The freehold interest in the land is comprised within four certificates of title:
1. CT No.: 340806, comprising an area of 1.2011 hectares
2. CT No.: 340808, comprising an area of 4.3541 hectares
3. CT No.: 461289, comprising an area of 2.2714 hectares
4. CT No.: 461290, comprising an area of 23.365 hectares.

Mr Bayley said that the property can be purchased as either one single lot or separately as Stage One and Stage Two. The Stage One land contains the three smaller properties which are tagged Frankton Flats Special Zone to facilitate development of a new shopping centre - incorporating opportunity for retailing, office, educational, visitor and residential accommodation and leisure activities.

The Stage Two land is currently zoned Rural General, although the land is subject to a proposed plan change being promoted by Queenstown Lakes District Council. If adopted, the plan change will permit mixed use development to include industrial, commercial, residential and educational properties.

The zone change is viewed as strategically important by the Queenstown Lakes District Council, due to existing and predicted growing demand for land zoned for such activities.

Queenstown has a population of 15,468 permanent residents and is recorded by Statistics New Zealand as being one of the fastest growing regions in New Zealand – with the population forecast to mushroom to 32,000 by 2026. Tourism is the town’s main revenue source – with Ministry of Tourism figures recording 1.53million visitors to the town in 2007. Those visitors spent an estimated $501million on tourism, hospitality and leisure activities in and around Queenstown. The Ministry of Tourism predicts that visitor numbers will swell to 1.77million in 2014 – with revenue from their stays growing to $787million in 2013

“Completion of the full development of 5 Mile will be a long term project. I’d say that this project could take some 10–15 years to fully populate, so potential purchasers will have to possess a vision which will become part of the Queenstown landscape,” said Mr Bayley.

Complementing the commercial and retail expansion of the Frankton area surrounding 5 Mile has been the construction and completion of the nearby Remarkables Park retail centre - housing a wide range of national and regional retailers such as New World, The Warehouse, Noel Leeming, Smiths City, Mitre 10, Dick Smith, Flight Centre, Hannahs, Video Ezy, and the ASB Bank.

Approximately two kilometres to the south is Kawarau Falls where development of the Kawarau Falls Station project is currently underway. That project is envisioned to create a world-class resort village comprising 13 buildings, with uses ranging from five star hotels, quality residential apartments and family accommodation units, through to cafés, restaurants and leisure amenities.

ends

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