A bargain-basement prime land purchase in central Queenstown is expected to trigger plans for a large apartment complex.
An undisclosed local party last month paid $3.1 million for a 7800sq m hillside section overlooking Queenstown Bay, between Lake Esplanade and Thompson Street.
Bankrupt former developer Rod Nielsen bought the same site for $10m in 2004.
Nielsen – who developed the 16-unit Esplanade Villas out front – was granted a resource consent for a nine-level 46-unit apartment complex. At the height of the boom he unsuccessfully tried to flog the site for $15m.
Nielsen’s Queenstown Villas (NZ) Ltd was placed in receivership in 2008 before any building works commenced.
Finance company Strategic Nominees was owed more than $11m for a loan related to the development of this land, receivers reported.
A year ago, the site was bought in a mortgagee sale for just under $3m.
According to rating records the buyer was Palmerston North-based Stanley Ltd, whose director Keith Marriott also owns two development sites along Queenstown’s Frankton Road.
Local Locations Realty real estate agent Chris Campbell – who brokered last month’s sale – says Marriott had intended holding onto Lake Esplanade.
“The only reason he sold is because he got a development of his in Auckland fast-tracked so he wanted to sell one of his Queenstown sites to help that along.”
Campbell says the new buyer, who’s paying $3.1m, has bought a bargain “because it’s the best development site that’s close to town with those sort of views”.
The price equates to just $396 per square metre compared to $1277 per square metre paid by Nielsen nine years ago.
Campbell: “It’s certainly been purchased at the right time because the market, technically speaking, is still low, especially for development land.”
Mountain Scene understands the new owner intends lodging a resource consent application for a multi-million dollar complex with up to 150 units.
Campbell says the land cost means a 90sq m unit could be put on the market for as little as $300,000.
Apart from a 17-unit development under construction in central Queenstown’s Hallenstein Street, there’s nothing else that’s brand new on the market, he notes.
“Many of the units on the market are tired, old and over-priced. What is planned for this site could revolutionise the property market in the short term because it’s a classic reflection of the fact the real estate economy in Queenstown is showing fantastic signs of being further on than in recovery mode – we’re now back in development mode.
“The investors are back, the spec builders are back, the multi-unit developers are back.
“We haven’t seen these guys in the last five years because the big players that had all the dough lost a lot of money.”