Tee-riffic opportunity for eagle-eyed property investors

A fully functioning suburban golf course and adjoining practice driving range in New Zealand’s biggest city have been placed on the market for sale.

Papakura Golf Course in South Auckland is a 1914metre-long course consisting of six par-threes, two par-fours and one par-five. The course was established in 1987 - and the fairways are now home to a number of mature trees and shrubs.

The course is bounded by rural land on two sides, with residential homes on the remaining two edges, and sits in one the country’s fastest expanding regions. However, a council zoning encumbrance over the land ensures that it must remain as a golf course and recreational amenity.

The latest Government Valuation for Papakura Golf Course rates the site’s value at $4million. Annual rates on the land are $15,664. The property is being marketed for sale by Bayleys Real Estate through a tender process closing on June 30.

Included in the sale is a 261square-metre single level clubhouse servicing the course and driving range. The clubhouse comprises of an office, storage room, retail display area selling clubs/bags/apparel, a café food outlet, and commercial kitchen, with decking winding around three sides of the building. A separate storage shed houses ground-keeping equipment.

The course was purchased by its current owners in 2006 - with the intention of redeveloping the land into a retirement village and four hole golf course. That proposal was opposed by the local community which wanted the 16.15hectare site preserved intact as a golfing and ‘green space’ amenity.

A hearing by what was Papakura District Council – now part of the amalgamated Auckland City Council – voted against lifting the covenant, which ultimately stifled the retirement village development plans.

Bayleys senior salesman Brian Johns said the council’s clear intention is that the amenity be preserved as a golf course.

“Owning your own golf course is the sort of thing many middle age guys dream of… along with owning their own motor racing track, their own horse racing track, or their own hunting estate,” Mr Johns said.

“And while there have been several golf courses for sale in New Zealand over recent years, none have been so close to a major urban area. The boutique nature of this course would make it ideal for a group of like-minded investors to ‘chip-in’ and have a joint ownership.

“The course was originally landscaped with low maintenance and green-keeping access as a priority – which is why the fairways and greens are all flat, and there are no deep bunkers or high maintenance hazards.”

The course is currently leased until September 2012, with a rent review and potential further four-year right of renewal. The club’s annual membership fee is $425. Alternatively, casual green fees are $20 a round - ensuring the course is busy throughout summer and its shoulder seasons.

In addition, the adjoining 10-bay driving and practice range has two pay-per-use baseball pitching machines suitable for softball batting practice.

Mr Johns said Papakura Golf Course had potential growth opportunities – including making greater use of the club house for private functions and events, or building on the location’s proximity to Auckland’s south-eastern fringe close to a large Asian population renown for its love of golf in New Zealand with its cheap green fees and easy access to tee times. There was a bogey attached to the clubhouse though.

“The course is in great condition… but the club house office and service areas are looking tired and would benefit from a refurbishment,” Mr Johns said.

“The venue is often used for private stag parties – with guests having a round of golf before returning to the club house for further entertainment. With a commercial kitchen and a range of short-order food available, the potential is there to grow the hospitality revenue streams or develop the venue as a corporate hosting location.”

Tenders for the sale of Papakura Golf Course close on June 30.