Accommodation complex with rare long-term lease for sale

A Hastings complex housing seasonal workers for the country's biggest organic orchard is on the market for sale with a 20 year lease.

Once a motel, the complex at 902 Sylvan Road, Mayfair has 80 beds and facilities for mainly short-term visa workers from the Pacific Islands who qualify under the Recognised Seasonal Employer scheme.

The 1000 square metre well-recognised almost round building on a 1616 square metre site is being marketed for sale by private treaty closing on October 23 through Bayleys Hawke's Bay salespeople Rollo Vavasour and Jake Smith.

Owned by Bostock Group, the largest organic apple producer in the Southern Hemisphere, the attraction are the property's key attributes of a substantial lease length and annual rent of $200,000, Mr Vavasour said.

“It is unusual to have a 20 year lease in any building but Bostock has to rely on seasonal workers from overseas for picking its organic apples and exporting conventional apples on behalf of independent orchardists.”

Bostock signed the 20 year lease in July and has two five-year rights of renewal with final expiry in 2049. The group pays all the outgoings on the property.

Zoned general residential under the Hastings District Plan, the unusual building was designed to the highest standard for 19 motel units, each having a separate kitchen, toilet and shower with a balcony or patio along with a ground floor laundry. The units have been converted and retrofitted to provide 70 beds. The rest of the property is a fully fenced concrete and hotmix yard.

Bostock employs 800 people at the season's peak and has along with two other of the country's biggest orchardists formed Fruitcraft, which has been recently been granted the master licensing rights from Prevar, for production and marketing the Dazzle apple, which has taken 20 years to develop by Plant and Food Research at its Havelock North station. Fruitcraft is predicting one million cartons of Dazzle will be exported by 2028, making it one of the country's most popular apple varieties.

The company, which has been exporting for 30 years, is part of Hastings long history as a food producing region commonly known as “the fruit bowl of New Zealand”.

Mr Vavasour said Hawke's Bay is the most efficient place in world to grow apples. “It has a lush green landscape across the flat sheltered Heretaunga plains, sun, clean aquifer water for nutrient-rich free-draining soils making perfect conditions to grow an abundance of apples. In this environment, the apples ripen slowly, need minimum human intervention and develop a naturally crisp texture and intense flavour.

“Apples are the the economic locomotive that is pulling the Hawke's Bay economy along, with plantings and exports increasing rapidly.” The region had an annual compound growth rate in planted area of three to four percent over the past six years. It has 61 percent of the country's pipfruit planted area – about 6521 hectares from 10,189 nationally.

There is comprehensive infrastructure supporting the industry. “As well as orchard expansion there is new coolstore construction and huge demand for worker accommodation both in specialised complexes but across the motel industry as well,” Mr Vavasour said. “Significant growth in tourism is squeezing accommodation while there is increasing demand for seasonal worker living quarters which have to be of a high standard.”

Bostock's huge operation means it owns and leases accommodation for workers and is taking long leases on rented complexes to ensure it has enough staff to harvest its crops, which also include squash, onions and maize.

The property sits on the corner of Sylvan Road and Jervois Street on the north-eastern outskirts of central Hastings opposite Windsor Park and Top 10 Holiday Park. It is within easy distance to New World and big box retail outlets at the Park Mega Centre and the main arterial road of Aubyn Street.

Mr Vavasour said the property has created plenty of interest and it would be of interest to a buyer who wants a long term hands-off investment in a growing and strengthening sector that shows no signs of slowing down.

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