Retail block set to gain in value from proximity to hotel
Retail property block set to gain in value from proximity to hotel development location
A block of retail properties containing two ethnic eateries – both set to benefit from the development of a new accommodation hotel immediately across the road – has been placed on the market for sale.
The three site block in the centre of Havelock North in Hawke’s Bay contains Chinese and Indian restaurants, as well as a gift and stationery shop. It will be immediately across the road frrom the new $20 million five-star boutique hotel and retail complex consented for the town centre.
The new 57-room Havelock North hotel and conference facility will replace what was the Happy Tav’ pub. The location’s development – albeit some 24 months away – has been welcomed by the likes of the Havelock North Business Association and Hawke's Bay Tourism.
Both business bodies forecast the hotel will bring in more corporate and leisure travelers to the area - both sectors which are predicted to generate a positive local-spend impact on town centre businesses.
The Havelock Road retail block facing the hotel development land and containing the Curry India and Happy Dragon eateries, along with the Gifts Galore shop, is being marketed for sale by Bayleys Havelock North through an auction process taking place on April 11.
Salesperson Daniel Moffitt said the land and buildings up for auction sat on 470 square metres zoned 8C under the Hastings District Plan. The site has more than 18 metres of frontage onto Havelock Road.
“Land and buildings in the Havelock North CBD rarely comes onto the market – which is why the Happy Tav’ location over the road was snapped up quite some years ago by developers who could see the long-term potential for the town as a tourist destination,” Mr Moffitt said.
“The intervening years have seen the planning approvals process move through its required chain, with the next step being the partnership of a hotel operator, and ultimately the building’s construction.
“With much of the town owned by Hawke’s Bay entities, many of whom know each other through both their commercial real estate and social networks, any time land and building come up for sale it’s the veritable ‘talk of the town’. As such, many of the retail outlets that do come up for sale, change hands quietly off-market.
“For example, since the middle of last year, all six commercial and industrial properties sold in Havelock North have been through sales with no open marketing.
“However, by taking this block to an open sale process, it ensures a wide buyer audience,” he added.
Happy Dragon restaurant has a current lease running through to 2016 with a final potential lease expiry of 2026. Gifts Galore has a current lease running through to 2015 with a final potential lease expiry of 2024. Curry India has a current lease running expiring this month but with a final potential lease expiry of 2018. Combined, the three tenancies generate a net rental of $95,000 per annum.
Mr Moffitt said that while the new hotel would have in-house food and beverage operations, it was well known that house guests – particularly those staying multiple nights – often chose to spend one occasion dining in-house, and the second or third occasion at nearby local establishments.
“All business travelers know how tedious and in fact lonely it can be, either ordering in food to their room, or sitting alone in a hotel restaurant. So they seek the atmosphere of nearby eating and drinking venues – where there is the chance to meet and mingle with ‘locals’,” Mr Moffitt said.
“By their very nature – Curry India and Happy Dragon will be right on the doorstep of the new hotel to pick up on that guest traffic. And with a range of Hawke’s Bay-orientated paraphernalia, the Gifts Galore shop is well positioned to attract guests seeking to purchase presents to take home.
“The pending increase in foot traffic and consequently turnover will give an underlying confidence to the operators of these three retail premises, which in turn underpins their long-term investment value.”