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On the block: The Dairy Private Hotel

By PHILIP CHANDLER

The freehold of a recently-refurbished landmark Queenstown boutique hotel is on the
market.

The Dairy Private Hotel, on the corner of Brecon and Isle Streets, is based around a 1920s
dairy.

It’s owned by local investors who’ve had it as a hotel — comprising 13 ensuite rooms, a four-bedroom apartment, two lounges and a dining area — since 1997.

Two years ago, its lease was bought for almost $2 million by Singapore-based Naumi Hotels, which has extensively refurbished the property.

The current rental’s $289,179 per annum, plus GST and outgoings, and the lease runs till
2036 with annual rent reviews till then of at least 2%.

It’s for sale by deadline private treaty, closing September 16, and is being marketed by
local Colliers agents Mark Simpson and Alastair Wood.

Simpson says as ‘‘a mid-range boutique hotel in terms of its tariffs’’, The Dairy’s not as badly affected by Covid as higher-priced accommodation or even backpackers.

‘‘A lot of Kiwis are staying in this level of accommodation.’’

However, he notes the landlords provided some rent concessions over the past year.

‘‘While we do have some challenges with borders being closed, there’s pretty common
confidence across the market that the medium-to long-term prospects for tourism and accommodation in Queenstown are pretty strong.’’

The information memorandum also makes great play about The Dairy being in the heart of an area ‘‘becoming the recognised accommodation and entertainment extension to the CBD precinct’’.

Brecon St’s on the main pedestrian access between the CBD and the Skyline gondola, and
The Dairy’s also close, it notes, to the Brecon St Upper Village retail and entertainment precinct, currently underway.

Nearby Man St’s also part of the planned arterial road project.

Simpson says what’ll appeal to investors is the reputation of the tenant and the length of the lease.

He also notes nearby Lomond Lodge, on Man St, recently sold for a healthy $5.2m at a yield of 4.2%.

scoop@scene.co.nz