CBD waterfront motel land and buildings go on the market

Media Release

7.11.2016

CBD waterfront motel land and buildings go on the market for sale

The land and buildings housing one of Napier’s few CBD waterfront accommodation providers, The Edegewater Motor Lodge, have been placed on the market for sale.

The land and building housing one of Napier’s few central business district waterfront motels been placed on the market for sale.

Not only does the 20-room Edgewater Motor Lodge on Marine Parade have wide sea views from all guest rooms over the Pacific ocean, with private decks and outdoor areas, but it also has one of the longest lease contracts of any commercial accommodation provider in Napier – with a lease through until 2040.

The 1,413 square metre freehold rectangular-shaped site has an exceptional wide frontage to the sea, and 1265 square metres of two storey building situated just 250 metres from Napier’s commercial and retail hub. The property – which is zoned fringe commercial and has a New Building Standards earthquake rating of 75 percent - also has a two-bedroom owner/manager’s residence.

The Edgewater Motor Lodge was built in the mid-1980s and since then has undergone a number of refurbishments – with the last of those in 2014/15 which raised the property to a four-and-a-half star Qualmark rating.

The accommodation operators leasing the premises have been running Edgewater Motor Lodge since 2007 and have signed a tenancy rental agreement lasting for at least another 24 years. The lease currently generates an annual return of $225,750 + GST.

The Edgewater Motor Lodge land and buildings are being jointly marketed for sale at auction in Auckland on November 30 by Bayleys Auckland salesperson Paul Dixon, and Bayleys Napier salesperson Sam MacDonald. The property at 359 Marine Parade has a Napier City Council rating valuation of $2.39 million.

Mr Dixon said that with Hawke’s Bay’s in-bound tourism numbers at an all-time peak and the tenant accommodation business and brand in a strong market position, the property’s owners were making of the most of the opportunity to sell up the real estate asset in a buoyant market.

Latest data from Statistics New Zealand records that international tourists are coming to Hawke’s Bay in record numbers – some 278,455 visitors for the 2015 calendar year, up 16.1 percent on 2014. Meanwhile, domestic guest nights simultaneously rose 4.6 percent to 751,658.

The data also recorded that the average length of stay for guests in Hawke’s Bay rose from 2.13 nights in 2014 to 2.21 nights in 2015.

The seaward-facing building housing Edgewater Motor Lodge is constructed of reinforced masonry, with timber framing upstairs. Lateral bracing is provided in both directions by reinforced masonry shear walls.

Additional operating infrastructure includes off-street sealed parking for 21 cars, an outdoor plunge pool, guest laundry, and BBQ courtyard. The motel’s guest rooms are configured in a range of studio, one and two-bedroom arrangements.

Mr Dixon said the cooperative professional relationship between the property’s landlord/owner and the motel’s business operator had ensured a regular and comprehensive maintenance of both the buildings and the landscaped exterior periphery.

“This maintenance schedule has not only extended the longevity of the property assets, but has also enabled Edgewater Motor Lodge to sustain above market-average nightly room rates,” Mr Dixon said.

“This in turn has enabled the Edgewater Motor Lodge business to easily meet its leasing commitments.”

Mr Dixon said that with 24 years left to run on the existing motel lease, the 359 Marine Parade property offered both a long-term investment or development opportunity.

“If Hawke’s Bay’s visitor numbers keep growing along current trajectory levels, the region’s tourism sector will be vastly different from its current picture. Most likely, there will be demand for even more room capacity – particularly four and five-star branded accommodation providers operating out of CBD and CBD-fringe locations,” he said.

“Currently properties meeting that requirement are few – with the likes of the Scenic Hotel Te Pania, the Art Deco Masonic Hotel, and Edgewater top of the list.

“That dynamic underpins the long-term viability of Edgewater Motor Lodge in its current format, and for potential vertical development of the property after 2040 which could, subject to council consent, add more rooms on higher levels.”

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