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Great location: The upper-floor interior of a CBD building that's about to go under the hammer

By PHILIP CHANDLER

Those interested in Queenstown commercial property will doubtless put a ring around July 1.

That’s the date for the resort’s first auction of a CBD property since Covid put a spanner in the works last year.

Colliers Queenstown’s auctioning 9B Church Lane, a small three-level building occupied by Hall of Fades barbershop on the ground floor and two separately-leased floors of apartments — one with two bedrooms and one with one — that are let out nightly.

The building — with a land area of just 79 square metres and floor area of 167sqm — was constructed in 2004/’05 and is owned by local couple Lyn Hamilton and Jay Berriman’s Lucky Dog Productions.

Ownership also includes a one-15th share in the Church Lane pedestrian precinct.

Under the hammer: The building purchase also includes a part-share in the Church Lane pedestrian precinct

Local-based Colliers director Mark Simpson, who’s listed the property with colleague Mary-Jo Hudson, notes the landlord, like most in the CBD, has offered some Covid rent relief due to the loss of a significant tranche of overseas visitors.

Rent relief offered to lessees of the top two floors comes off at the end of this year.

Currently, the building returns $91,516 a year.

Despite Covid, Simpson detects ‘‘a real strong belief and interest in Queenstown as a medium- to long-term growth market for commercial property’’.

‘‘Nothing’s guaranteed but, all things being equal, we have history showing us, despite cycles, CBD Queenstown property has still continued to outperform almost all other centres in New Zealand in terms of rental growth and yields.’’

And in the current climate, Simpson says, ‘‘as you’ve seen with consumer spending, you’ve got a whole lot of money looking for a home in NZ that can’t necessarily be spent offshore, or hasn’t or wanted to be spent in other asset classes’’.

‘‘Property’s become the darling, so every time something of quality comes up, it gets chased pretty hard — and supply and demand dictates price rises when that imbalance exists.’’

In the case of 9B Church Lane, he says it’ll attract a much wider pool as it’s smaller than what’s usually offered in the CBD.

Its mixed-use nature also enlarges that buyer pool, Simpson says, as once leases expire on the upper floors, a buyer’s likely to want to use the apartments for their own use, then rent them out for a nightly rate when they’re not there.

This, he suggests, ‘‘alters the way people look at it as an investment’’.

The property’s valued at $1.23 million, however that dates back to 2017, and rateable values in the CBD haven’t proven to be a reliable guide, Simpson says.

‘‘That’s why we’ve worked with the owners to adopt an auction process, because that is really the only way we can truly understand its market value.’’

The auction’s set down for noon on July 1 at Colliers’ Athol Street offices.

It’ll be called by Colliers agent Brendan Quill.

scoop@scene.co.nz