A 12-level hotel and apartment complex for sale in Auckland’s central business district is expected to attract keen attention from add-value investors and developers.
The property at 11 Mount Street, known as Scholar Hotel Apartments, sits within the city’s universities district and is a short walk from Queen Street, in an area highly sought-after by students and commercial property investors.
A buyer is being sought for the entire building with more than 100 freehold strata units for sale in one line.
The structure is currently undergoing a reclad, with an Auckland Council-approved remedial works plan underway to address moisture issues. It is expected to appeal to long-term investors and developers keen to capitalise on future upside from the strong demand for student accommodation and serviced apartments close to the CBD.
The property at 11 Mount Street is now being marketed for sale by way of a tender closing on Thursday 29 April, through Bayleys Auckland Central and Bayleys’ international sales team.
Salespeople Oscar Kuang and James Chan said the property consisted of a building containing 103 freehold strata units with a total floor area of approximately 1,791 square metres, on some 310 square metres of land.
“Constructed in 2003 on the northern side of Mount Street, this modern building contains 100 accommodation units and three commercial units,” said Mr Kuang.
“Each accommodation floor has a similar design, with five to nine individual units ranging in size from studios to two and three-bedroom hotel-style apartments with bathroom and basic kitchenette facilities.
“Three commercial units on the ground and basement levels are used as a common kitchen, laundromat and a takeaway food outlet fronting on to Mount Street.”
Mr Kuang said there was the potential for a new owner to add value by reconfiguring or rebuilding some floors to improve the layout and quality of living spaces.
“While current remedial works progress on upper levels, around 50 accommodation units up to level six are fully operational as serviced apartment/hotel accommodation. These are typically generating daily income of $30 to $80 per unit,” Mr Kuang said.
The 50-square-metre ground-floor takeaway tenancy currently returns $47,500 plus outgoings and GST per annum, on a lease that runs through to 2023 with three further three-year rights of renewal.
Mr Chan said the building’s total rental income potential, once fully tenanted, was estimated at $1 million based on previous financial statements.
The Mount Street site is zoned Business – City Centre with a maximum height control of 50 metres. This zoning enables the concentration of the highest intensity of development within the city centre and allows for a wide variety of uses.
Mr Chan said the Scholar Hotel Apartments’ location right alongside AUT, and within three minutes’ walk of the University of Auckland, positioned it ideally to capture rising demand for student accommodation.
“The student accommodation sector in Auckland has experienced strong demand, driving significant development activity in recent years. Demand has been boosted further by Covid-19, which has led some students to stay in the country rather than study overseas or take a gap year. The University of Auckland reported record-high applications for accommodation it provides this year.”
Mr Chan said there was the potential for a further uplift in demand in coming years when a ‘new normal’ post-Covid environment allows international students to return in numbers.
“Similarly, the Mount Street site’s positioning just a few minutes’ walk from the concentration of commercial activity and amenities in the CBD will continue to underpin demand for a serviced apartment and hotel offering.
“A new owner will have the opportunity to optimise and potentially blend different accommodation offerings at this site to fully capitalise on its unique location,” Mr Chan said.