As New Zealand tourism makes a full recovery, why does this South Island commercial development offer such boundless investment potential?

Figures released by Stats NZ show that overseas visitor numbers have risen month by month since New Zealand fully eased its travel restrictions in August 2022, with local tourism and related industries undergoing a comprehensive recovery. As at August this year, overseas visitor arrivals stood at 2,695,000. Although still below the pre-pandemic peak of nearly 4,000,000, this was the highest figure since mid-2020. Tourism New Zealand chief executive Rene de Monchy said tourism’s contribution to the economy was crucial amid pressure on the global economy. Before the COVID pandemic, overseas visitors generated NZ$17,000,000,000 in annual revenue for the New Zealand economy. He expects revenue across New Zealand’s tourism and related industries to grow strongly from this summer.

China Southern’s direct flights to New Zealand’s South Island are set to resume

Several Chinese airlines have recently announced that a number of direct routes between China and New Zealand will soon resume, with new services also set to launch. These include China Southern’s Guangzhou–Christchurch service, eagerly awaited by travellers in China, which is due to return in November.

So, with New Zealand tourism offering boundless growth potential over the coming years, how can ordinary investors quickly seize the investment opportunities arising from this recovery?

Here is an opportunity! A freehold commercial property covering 7816 square metres, more or less, in the South Island coastal town of Oamaru is looking for a new owner. Investors can expand the existing motel operation through refurbishment work already under way and maximise the site’s development potential. The property is being offered for sale by international tender, closing at 4 pm on Friday 8 December 2023 unless sold prior. Senior Bayleys salesperson Oscar Kuang said the property combined existing motel rooms and facilities, a refurbishment project and the limitless future potential of a large vacant site. It is expected to attract considerable interest from commercial property investors, hospitality start-ups and developers.

A precinct of Victorian architecture

Alongside major attractions such as Queenstown and Christchurch, another highly popular destination on South Island itineraries is Oamaru, a beautiful coastal town in the Waitaki district of central Otago. It lies 115 kilometres north of Dunedin and 250 kilometres south of Christchurch. Although its population is only a little over ten thousand, Oamaru boasts distinctive natural scenery and impressive historic buildings and streets. Renowned for its picturesque coastline, the town offers magnificent Pacific Ocean views and rugged, spectacular landforms that give the area its distinctive character. It has a long history, with heritage buildings dating back to the prosperous Victorian era that remain well preserved today. Visitors can stroll along cobbled streets and admire ornate limestone buildings reflecting the grandeur of the 19th century.

The area is home to yellow-eyed penguins

Steampunk museum

Alongside its historic charm, the town has a lively, welcoming community and offers a range of modern amenities, cultural attractions and outdoor adventures. This gives travellers a distinctive blend of rich history and contemporary life. Whether through its coastal scenery, the appeal of its historic sites or its hospitable residents, Oamaru’s unique charm continues to draw countless travellers and investors keen to explore.

 

Aerial view of the property

An overview of the property for sale

As shown above, the property for sale comprises three components.

The motel at 14 Joy Street

Eden Garden Motel at 14 Joy Street has an approximate floor area of 1,116 square metres, with 21 guest rooms, a reception area and a shared kitchen. Set high on the northern slope of a hill in the town, it enjoys sea views and occupies approximately 3429 square metres of freehold land. In 2019, the local council signed a partnership agreement with AirAsia to train flight personnel locally. Since then, most of the motel’s rooms have been rented to trainees attending short-term courses, generating an annual rental return of approximately NZ$200,000.

 

The backpacker accommodation refurbishment at 19 Joy Street

Directly opposite the motel, the owner is refurbishing backpacker accommodation to meet demand that exceeds supply, with work on a further 11 rooms scheduled for completion in early 2024. Located at 19 Joy Street, the project has a floor area of 300 square metres on approximately 905 square metres of land.

 

The project at 19A Street has received resource consent

Behind the backpacker refurbishment project is approximately 3482 square metres of development land at 19A Joy Street. Resource consent and building consent were granted early this year, allowing immediate construction of a modern motel with 40 self-contained units. According to the consent documents, the plans provide for apartment suites ranging from 41 to 55 square metres, along with 30 parking spaces. The foundations are already in place, and interested developers can begin construction at any time.

The Otago Daily Times recently reported that Waitaki District Council had approved a tourism business development plan to ensure the recovering tourism industry grows sustainably. The plan focuses on making the district’s attractions more appealing to visitors and extending their stays, supporting more sustainable tourism development across the area centred on this historic coastal town. Since COVID restrictions eased, visitor numbers from China, a major source market for the district, have rebounded significantly, making August exceptionally busy for attractions such as the Otago blue penguin conservation centre. Oamaru and the Waitaki district have also attracted attention from television and film production companies, with commercial filming in the area expected to increase following the end of pandemic restrictions.

Commentators have said these positive tourism developments highlight the promising outlook for the area’s visitor accommodation sector. Growing visitor numbers, particularly from China, and strong interest from film and television production companies will lift occupancy rates while creating wide-ranging growth opportunities for local accommodation owners. There is good reason to believe these opportunities will make Oamaru and the Waitaki district one of the most attractive motel investment destinations in New Zealand’s tourism sector.

Bayleys Asia Pacific president James Chan said the development was an investment opportunity not to be missed and would become an important part of the area’s future infrastructure and cultural landscape. A freehold land development of this scale, in such a prime position on the edge of Oamaru’s central business district, is very rare on the market and is expected to attract strong interest from buyers in New Zealand and overseas. So, if you are eager to find your next investment opportunity, what are you waiting for? Contact the Bayleys commercial property sales team now for more information.

 

James Chan James Chan 021 934 054	Oscar Kuang Oscar Kuang 021 609 429

 

BAYLEYS REAL ESTATE LTD, AUCKLAND CENTRAL,

LICENSED UNDER THE REA ACT 2008