Former Masonic Hotel building under the hammer
Gisborne’s former Masonic Hotel building which has regal connections, is to be auctioned (unless sold prior by private treaty) as receivers step in to manage the assets of the property’s owners.
The four-storey building on the corner of Gladstone Road and Lowe Street has a place in Gisborne’s history briefly hosting Queen Elizabeth II for lunch and rest during her Coronation tour in 1954.
The Masonic Hotel closed in the late 1980s, and the property now offers a mix of retail and numerous residential tenancies - including a large flagship apartment on the first floor - along with vacant space yet to be optimised.
Mike Adams of Bayleys Auckland and Colin McNab of Bayleys Gisborne are marketing the property on instruction from receiver Gareth Hoole, of Staples Rodway, who is managing the assets of Johnstone Property Investments (in receivership).
The auction will take place at 2pm, 14 September at Bayleys Gisborne.
There is ample scope for a new owner to develop the vacant components of the property and hence increase the rental return. The high-profile inner city property close to the marina, river and all amenities has lease agreements in place for the three commercial ground floor retail tenancies, and varying lease arrangements for the residential component.
“Given the receivership status, we are still piecing together the financial picture, but the fact that the property is being sold at auction indicates the receiver’s motivation to get the property sold,” explains Mr McNab.
The property has a 23m frontage to Gladstone Road and 50.49m frontage to Lowe Street in a high pedestrian area of the Gisborne CBD zoned Inner Commercial. There is a recessed entranceway off Lowe Street which services the upper floors.
“The property has recently
had a new roof installed, however there are still
significant areas within the building which are crying out
for redevelopment,” says Mr McNab.
“Disused areas include the bar, amenity and storage spaces to the rear of the ground floor along with the bar and former ballroom areas on the first floor. These could be turned into office tenancies or further apartment use with some creative thinking.”
There are three existing tenancies on the ground floor fronting Gladstone Road. In all three cases, the tenants – Subway, La Cor hairdressing and Evolution Clothing - bear the cost of power, water and telephone. The total annual rental income from the commercial component is currently around $61,650 (including opex), plus GST.
There are a further two vacant retail and one office tenancies on the ground floor with some remedial work required to bring these up to lettable standard.
The building has 11 residential apartments available for lease. The property is currently returning circa $90,000 per annum less expenses from a number of periodical tenancies within the residential apartments. This amount will vary based upon occupancy levels, with areas of vacant space providing an opportunity for adding further value to the investment.
The apartments range in size from a modest 33.9sq m to the former owner’s apartment No. 101 which has a floor area of 260sq m.
“This apartment on the first floor has five bedrooms, four bathrooms, separate dining and living areas and a balcony overlooking Gladstone Road; the balcony where the Queen and Prince Philip were photographed on the 1954 Royal tour,” says Mr McNab.
“There are native timber floors, ornate ceilings and other character remnants of the former Masonic Hotel.”
There are a further two incomplete apartment spaces and other sizeable disused areas perhaps suitable for residential apartment conversion.
A lift runs to the third floor with stairs from that level to the rooftop area which has a machinery plant room. There is also a basement storage area.
“You could say that the building remains a definite work in progress with upside for a visionary new owner who recognises the inherent value of this prime Gisborne CBD property. Clearly there are gains to be made through further development and a more cohesive and concerted approach to the property as a whole,” says Mr McNab.
The property is a Category 2 listed building with the New Zealand Historic Places Trust and a category A historic building under the Gisborne District Council’s district plan. The land it is built on reportedly fetched the highest price of £51 when the first Gisborne sections were auctioned in 1870.
The site has been home to three incarnations of the Masonic Hotel (so-named as there was a Masonic lodge premises on the upper floor), with the current masonry building designed by reputable architects Burr and Mirfield. It was constructed from 1928-30 according to NZHPT records.