Heritage Hotel’s Grand Tearoom for sale

5:00 AM Saturday March 18, 2017 Colin Taylor

The penthouse floor at 35 Hobson St features a high-stud art-deco ceiling and distinctive chandeliers. Photo / Supplied

Investors, owner occupiers or developers have a chance to buy a slice of Auckland’s history in the form of the ornate Grand Tearoom atop the Heritage Hotel in Auckland’s CBD.

The 539sq m top floor at 35 Hobson St has operated as a function centre since the building was converted to a hotel in the late 1990s.

Prior to that it was an integral and popular feature in the Farmers department store building where shoppers could sip a cup of tea and nibble on cake in elegant art-deco surroundings. 

The property includes four car parks and is generating net annual rental income of just over $300,000 from a 20-year lease to Dynasty Hotel Group expiring in October next year.

Featured in Bayleys’ latest Total Property portfolio, the floor is for sale by international tender closing on April 21 unless sold earlier by private treaty.

The floor is being put up for sale on behalf of a private investor who has owned it for about 17 years, says Matt Lee of Bayleys’ Auckland-based international division, who is marketing it with colleague James Chan.

“The lessee has indicated it will not be renewing its lease over this part of the hotel so this opens up a range of commercial or residential add-value options for the purchaser of this exceptional property,” says Lee.

“The owner obtained a five-year resource consent for the subdivision of the floor into three or four penthouse apartments but has now decided to sell to pursue other interests and leave that opportunity to someone else. Alternatively, the entire 539sq m space could be converted into one spectacular penthouse suite making it one of the largest of its kind in New Zealand.”

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The Heritage Hotel at 35 Hobson St in which the Grand Tearoom penthouse floor is for sale. Photo / Supplied

Chan says the character features of the floor, particularly the high-stud art-deco ceiling, with its intricate detailing and distinctive chandeliers, make it an appealing proposition for a variety of uses.  Extensive floor to ceiling glazing also makes the most of sweeping views of the Waitemata Harbour. There is access from the floor to two separate external decks each having unobstructed views over the Viaduct Basin and the Hauraki Gulf. 

“The Grand Tearoom can host 450 guests in cocktail style or seating for up to 300 for a full banquet and has been a popular venue for weddings, other private events and corporate functions,” says Chan. “High profile sporting teams such as Italian America’s Cup yachting syndicate Luna Rossa and more recently the All Blacks have also used it as their team headquarters and meeting place when they have been staying at the hotel. In 1999, Bill Clinton, then President of the United States, presented to APEC members in the Grand Tearoom.”

Chan says the next owner has plenty of time to consider options for the premises with the resource consent for apartment conversion remaining in place until 2020.

The Heritage Auckland building was first constructed as a warehouse for Auckland entrepreneur Robert Laidlaw’s rapidly growing mail-order company called ‘Laidlaw Leeds ‘which supplied a range of household goods with a money-back guarantee to country customers isolated from big city shopping.

The warehouse and office building cost £38,000 to complete, opening in April 1914. In 1918, Laidlaw sold the business to the Farmer’s Co-operative Trading Company, but soon after returned as general manager to spearhead what was to become one of New Zealand’s most successful retail companies.

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The top floor has sweeping views of Auckland Harbour. Photo / Supplied

In the 1930s, a large wing was built onto the 1914 building which included the impressive silver service Harbour View Tea Rooms, now known as Grand Tearoom. With seating for 300 people it became one of Auckland’s most fashionable dining venues and also hosted many civic functions over the years.

Farmers closed its CBD department store in 1991 and it remained vacant until its conversion to the Heritage Hotel which opened in 1998.

As part of the redevelopment ofthe property by Symphony Group, the Grand Tearoom was restored to its former glory.

Luna Rossa made the hotel its base of operations every sailing season from 1998 to 2002. The Italians had around 90 people staying at the hotel and block booked the Grand Tearoom for six months at a time.

Chan says the property for sale is well positioned in the increasingly popular western side of Auckland’s CBD between The Viaduct and Britomart precincts. It is also close to two of central Auckland’s major developments – Precinct Properties’ $681 million Commercial Bay redevelopment of the former Downtown Shopping Centre and Sky City’s International Convention Centre, projected to cost $700m and be completed in 2019.

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Matt Lee and James Chan of Bayleys