Renewed interest in Queenstown commercial property is reflected in two high-value CBD buildings on the market.
Colliers International is marketing both QRC House, incorporating Queenstown Resort College, and the Monty’s building, including Monty’s bar and the underground Subculture nightclub.
QRC House has attracted 36 registrations of interest, and there’s also been strong enquiry for the Monty’s building, local Colliers sales broker Mark Simpson says.
These are the first two CBD buildings formally on the market for two years, he notes.
“It does show signs that the interest in commercial property is coming back again from the buyers to the point where the vendors are prepared to let go really high-quality property.
“Unless you’ve got a much better use for the capital, then in the last couple of years, why would you sell?”
QRC House co-owner, Queenstowner Sir Eion Edgar – who’s also majority owner of Queenstown Resort College – says the building’s on the block because partner Doug McBride is keen to sell.
The proceeds will allow the college to continue expanding, Edgar says – and adds QRC’s future is protected by a long lease, extending 19 years including two rights of renewal.
QRC House’s capital value is an eye-popping $10 million, $8.3m of which is the building value.
The rateable value of the Monty’s building is $3.9m, with the building valued at $2.1m.
However Simpson says those figures don’t mirror market value.
“They were [valued] in 2008, but arguably the values have come back since then.”
He says the figures don’t take into account lease terms – “that’s what strikes value in a commercial property”.
QRC House’s annual rent roll is $614,445 plus GST.
For the three-floor Monty’s building it’s $282,340.
Simpson explains that commercial property here beats to a different drum than elsewhere in the country.
“Our yields [rent as a percentage of property value] have been five to six per cent, which is pretty much at the bottom end, but we have much stronger capital growth than almost any other region,” he says.
Simpson believes both properties tick a lot of boxes.
He calls five-year-old QRC House, which has won both architecture and construction awards, “a Rolls Royce of a building”.
“It’s got very solid fundamentals, which is really hard to find, not only in the current environment but any part of the [property] cycle.
“It’s been built to a really high standard because of the nature of its use.
“It’s not like some of your office partitions where you can hear the person on the phone next door.”
Likewise, the 2003 Monty’s building “provides strong fundamentals difficult to find in today’s market for
commercial investment, particularly in Queenstown”, Simpson says.
He points to a high-quality building with rare outdoor dining space, excellent location and three long-term leases.
Two of the three tenancies – Monty’s and the upstairs office/three-bedroom apartment – are held by the building owner, Queenstowner Barry Ellis.
Both properties are for sale by deadline private treaty, which is similar to a tender.
Offers close March 25 on QRC House and March 31 on the Monty’s building.