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Property Ref: 2390

Superb Clifton Court Motel Freehold Investment in Tokoroa

Property Type: Investment Opportunities, Motels, Commercial Real Estate

Sale Type: Freehold Investment

Region: Waikato

Physical Address: 111 Main Rd, Tokoroa

Price: $3,995,000 (+GST if any)

Broker: Malcolm Teesdale

Mobile: +64 27 530 8738

Email: malcolm@tourismproperties.com

Clifton Court Motel is frankly amazing!

After 37 years in family ownership, the motel has undergone a four-year transformation that must be seen to be believed. This is not just a superficial redecoration: the motel has been gutted, back to its very solid bones, then completely rebuilt to the highest standards.

At the same time, the owners have been careful to future-proof the property, with features including solar electricity, electric vehicle charging points, LED lighting, on-demand gas hot water, the fastest available broadband, USB chargers, Apple TV and Netflix throughout…

The result has been rewarding: turnover is increasing year on year and the motel rates 4.5 stars on Trip Advisor 2017.

The Property:

Clifton Court sits on 5,134 m2 on State Highway 1.

The motel comprises 18 ground floor units in flexible layout:  5 studios;  9 one-bedroom units;  3 two-bedroom units; and 1 one-bedroom executive suite. There is also “unit 19” adjacent to reception, a one- bedroom unit available for motel minders, or as overflow when the motel is full. Concept plans have been drawn up for 6 further studio units and these will be included in the sale.

Also beside the stylish reception area is the separate motel kitchen. Upstairs is a spacious, four-bedroom owners’ home: like the motel units, completely rebuilt.

There’s a guest laundry, massive motel laundry, plant room, huge parking, excellent signage, security cameras and more. The chattels throughout are contemporary and stylish, the plant and equipment comprehensive.

The Offer:

1.       We are offering the Freehold Investment (land and buildings) at $3,995,000. The new 35 year lease has an initial rent of $235,234 +GST per annum. The lessee pays 100% of outgoings and rent is reviewed 2 yearly to CPI plus 1%.

2.       The Lease has been purchased by the previous Managers, part financed by the current owner. As part of the deal, the finance contract ($797,932.00 at 3.00% interest over 12 years – P&I repayments $85,260 pa) will be assigned to the Investor.

Qualified enquirers will have access to full financial disclosure, including week by week turnover since 2002 and financial statements for several years.

Clifton Court Motel is a fantastic long-term passive investment opportunity.  It is effectively a brand-new motel but with a proven trading history, generating sound returns under experienced lessees.

At this new reduced price, Clifton Court is a must-see.

About Tokoroa

Tokoroa is a pleasant, family-oriented town, ideally sited on State Highway 1. It services the many significant industries in the area: principally farming, forestry and transport. With no significant competition, Clifton Court is the premier motel in the town and the finest for some distance, attracting regular custom from tourists, corporates and visitors for family occasions.

Why invest in a Motel?

Motels are widely considered to be excellent commercial investments. They offer greater stability of tenancy than conventional commercial investments (shops, factories, offices) because they provide both home and business to a lessee who has made a significant financial commitment to be there.   Lessees are reluctant to walk from their investment as they have too much to lose. In the unlikely case a lessee defaults on rent payments, the investor can re-sell the lease to a new lessee for another full premium and restart the lease term. The freehold owner could be financially advantaged by a lessee’s failure.

Banks favour such investments as they generally have long term leases with the freehold owner having little commitment to ongoing repairs and no commitment to the business operation.  These are generally “bottom drawer” investments highly sought-after by family trusts and wealthy individuals.

The lessee must comply with the terms of the lease, paying all costs incurred in running the business, including repairs, maintenance, rates and insurance. The main responsibility of the investor is to normally cover all structural maintenance/repairs.  Because the tenant has bought their business, which is also their home and income source, they will work hard to maintain and build its value – which, in turn, can be positively reflected in the value of the property asset.  The better the lessee/tenant does, the more rent they can afford to pay and ultimately the investment value will grow as well.

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Lease

Weekly Turnover

Occupancy

Unit Configuration

Property Details

Property Type

Investment Opportunities
Motels
Commercial Real Estate

Sale Type

Freehold Investment

Region

Waikato

Physical Address

111 Main Rd, Tokoroa

Price

$3,995,000 (+GST if any)

Contact Agents

Malcom Teesdale - Tourism Properties Business Broker

Malcolm Teesdale

Tourism & Hospitality Business Broker
Waikato, Taupo, Central Plateau & Bay of Plenty
International: +64 27 530 8738
NZ Mobile: 027 530 8738

Email: malcolm@tourismproperties.com

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