Mortgagee tenders close tomorrow for CBD’s final undeveloped mega-site.
Wanted: solvent owner for the last undeveloped pocket of Queenstown’s CBD.
Up for mortgagee tender – bids close at 4pm tomorrow – is a steeply-sloping 2643sq m site off lower Shotover Street that’s somehow resisted commercial development until now.
The Shotover St frontage, between Crowne Plaza Hotel and The Lofts Apartments, features a house occupied by a Salvation Army clothing store.
Also included are two flats in the Hay St cul-de-sac behind, plus a parcel of land below Man St beside a large commercial carpark.
The property originally appears to have been aggregated by prominent Wakatipu landlord, Irish investor Eamon Cleary.
He on-sold it four years ago for $8 million to Queenstown Investment Holdings, owned by now-bankrupt Christchurch developer Dennis Thompson and his partner Sharon Bartlett, who completed Queenstown’s Gorge Road Retail Centre and what’s now the Base Discovery Lodge backpackers in Shotover St.
Early this year The Press reported about 20 companies connected with Thompson had gone into liquidation in the past two years with a combined indebtedness of about $18m.
The former big-league developer was reportedly on the dole but living in a mansion and driving a Range Rover.
It was reported early this week that Otago mortgagee sales, the majority being Queenstown development properties, rose from five in March last year to 11 this March.
Locations Realty is running this week’s tender for first mortgagee Strategic Nominees.
The site’s available as one block or five individual titles between 500-600sq m. According to latest QV valuations, total capital value is $9.4m.
Last July, Queenstown Investment Holdings gained resource consent for an eight-level $25m-plus complex comprising nine shops, a restaurant, 44 hotel rooms, 65 apartments and six penthouses.
The most notable feature was an internal courtyard open to the sky, with a lift up to Hay St.
Parking requirements were taken care of by the developer leasing 80 spaces in the adjacent Man St carpark – but that deal’s now null and void after $300,000 for eight months’ rent and outgoings weren’t paid.
While the earlier consent tells a would-be buyer that the site could handle a large development, Locations director Greg Ross says there’s “very little interest” in those specific plans.
“It’s very hard to make any new large development stack up in today’s market,” Ross says.
“In this cycle it’s just a sitter for somebody to purchase, reconsider their options and wait for the market to turn.”
The sale price won’t create a record because Queenstown’s not short of commercial space or hotel rooms, Ross says.
It’s possible buyers will prefer the option of taking one or two individual lots.
“It could suit owner/occupiers wanting their own offices, or someone wanting less dense residential use,” Ross says.
Most interest has come from locals though there’ve also been “two very keen Australians”, he adds.
Ross expects more than 10 bids will be lodged by tomorrow’s deadline.