Heritage investment with development upside
An historic former Woollen Mill that is now a popular events venue has been put up for sale in one of Napier’s most desirable and tightly held residential suburbs.
The Old Mill Napier on Main Street is located on one of the few remaining large, developable landholdings in the Hospital Hill area.
It comprises a licensed function centre, four residential tenancies, a courtyard garden, large arena and an area of native bush on a 2.76ha freehold site.
There is also 1.25ha of undeveloped land waiting to be unlocked for new housing.
The land could potentially accommodate 18 residential lots of 1,500sq m each, or 30 semi-detached townhouses on a shared site.
A new owner could develop the land while drawing on $85,940 in net annual rent from the function centre and residential tenancies.
There is also potential for an owner-occupier to run the function centre business themselves, while drawing on residential rental income and exploring development options.
Colliers International Broker Rob Nankervis has been exclusively appointed to market the property for sale by tender closing at 4pm on Thursday 28 November.
“This is a rare opportunity for developers, land bankers or high net worth individuals to acquire a unique heritage property with enormous residential development potential,” he says.
“The property’s character, history and idyllic natural setting provide multiple options for investors with a vision to creating a unique urban lifestyle offering.
“Abundant native plantings attract a chorus of birdsong, which is rare to find in urban areas, providing an ideal setting for an eco-conscious residential development.
“The vendor has obtained a geotechnical report which has identified several residential building sites suitable for development.
“Two preliminary development surveys have also been carried out, providing a range of options for a new owner to explore.
“With Napier’s economy and property market going from strength to strength, this is the perfect time to write a new chapter in the Old Mill’s storied history.”
Main Street was first occupied by colonial settlers in 1856, when Napier’s first military encampment was established in Onepoto Valley.
In the 1890s, three farmers formed a company and built the Woollen Mill on the military encampment site. The original brick buildings were extended to house the weaving and finishing departments in 1923.
The original business operated from this site until 1969 when it moved to a new modern mill in Awatoto.
In 1973, the property and buildings were purchased by Kane Carding Co Ltd. The business carded wool for handspinners and weavers in New Zealand and around the world until 1991.
The owners also set about renovating and repositioning the historic buildings. By 1980 they had added character studios and apartments, as well as an indoor riding arena for training horses and coaching dressage.
The Old Mill Napier function centre, which features a courtyard garden and a licensed dining and dancefloor area, was launched in 1990. Today, it is a popular venue for weddings and private parties.
Native plantings and walkways were added to the area above the Mill buildings from 2008 to 2012.
The landholding was expanded in 2016 when the owners purchased an adjoining site that was formerly part of the Napier Hospital grounds.
The rest of the former hospital site is proposed to be transformed into a residential development, which Nankervis says highlights the potential for the adjoining Old Mill Napier site.
“There’s so much potential here to make the most of the substantial site and sought-after location – especially given the scarcity of bare land in the Hospital Hill area.”
The property for sale is located on three titles at 32, 32B and 36 Main Street. All three titles are zoned Napier Hill Character.
The Old Mill Napier title has an additional code of compliance certificate and resource consent allowing the function centre to host events and wine tastings.
The function centre business pays $22,500 in annual rent. It generates about $70,000 to $90,000 per annum in gross revenue.
A new owner has the option of renewing the current lease or operating the business themselves.
The residential tenancies return $1,220 a week, contributing $63,440 in annual income.
The 1923 brick building is on Napier’s heritage list while Heritage New Zealand has indicated its intention to undertake a full heritage assessment in coming years. These listings do not restrict development but bring attention to the historic significance of the site.
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