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At a time when vacant residential land close to the CBD is under pressure, the sale of the Maltworks Estate in Heathcote is likely to attract interest from developers.

The 4.1ha site is among nine local properties, with an estimated combined value of approximately $13 million, being put up for auction on October 28 by Colliers International in Christchurch.

Hamish Doig, Managing Director of Colliers International in Christchurch, said that while the city had clearly suffered a severe setback, there was still strengthening interest in the commercial property sector.

“Decisions are continuing to be made. We have clients wanting to sell and investors poised for action. I think it will be a very good way to demonstrate renewed interest in our market.

“We made the decision to auction because the reality is that it remains an excellent way to sell commercial property and we believe the market will respond well to this approach at the moment. Although none of these properties is the subject of a mortgagee sale, the vendors are all motivated and realistic. These are affordable investment opportunities and we expect that we will get multiple parties interested in purchasing – which is the key ingredient for an auction campaign,” Doig said.

It is the second time in 18 months that the Maltworks Estate, zoned Business 4, has come to the market but Industrial Specialists Jonathan Lyttle and Gary Seear of Colliers International, believe the timing is ideal.

“The aftermath of the earthquake has developers and the Christchurch City Council quite rightly looking anew at areas which are suitable for residential development relatively close to the central city.

“While this site is earmarked B4 at the moment, it is an orphaned industrial site surrounded by residential. We believe the council will be realistic about a possible change in zoning to mixed use residential. Naturally there will be a rigorous process involved in any subsequent consents,” Lyttle and Seear said.

The property is owned by Nelson-based Ngakuta Ltd, who the brokers said are keen to sell and realistic about the current market for land prices.

Maltworks Estate comprises about a dozen buildings, including a large warehouse, a brick factory building and the tall silo tower which needed Australasia's biggest continuous concrete pour when it was built in the 1970s.

The maltworks date from the 19th century, a time when the area was heavy with industry because of its proximity to Lyttelton. From 1875 the works were owned by grain exporters Royse, Stead and Company. At one time it was among more than 100 maltworks in New Zealand.

The plant's 130-year working life came to an end in late 1999 when its then owner, the Canterbury Malting Company, a joint venture between DB Breweries and Lion Nathan, shifted all malt production to Marton in the North Island.

Lyttle and Seear said that the land was ripe for a residential zoning given the changing nature of Heathcote and the growth of industry to new developments around the Port Hills area.

Although not all the approximately 2700 homes reported to be affected by the earthquake will need to be replaced, the total figure is four times the long-term annual residential take-up in Christchurch, they said.

A block of modern retail stores at 99 Cashel St is also among the auction offering. The building is adjacent to the Shades Arcade, bought last year by local investor Nick Hunt. Owned by Trust Investments Management, of Auckand, it has a net lettable area of 782m2 with a holding income.

Commercial investment broker Merv Davies said the building suffered almost no damage in the earthquake and believed there was potential for growth.

“Rental rates in the location are well down on where they were in the recent past and have probably bottomed out, leaving good room for future growth.”

Other properties include three commercial buildings in Manchester St, one of which is on the corner of Kilmore St; and a prime corner site in Cambridge Tce overlooking the river.

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