- Troy Stewart and partners are selling Dunedin’s Alva House due to hospital construction delays.
- The boarding house, intended for workers, remains profitable but Stewart seeks to “cash in”.
- Alva House, a historic 25-bedroom property, generates nearly $240,000 annually in rental income.
The owners of a colossal boarding house in central Dunedin have put the property on the market for sale, citing further delays to the delivery of the city’s new hospital.
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Canterbury investor Troy Stewart and his business partners purchased Alva House at 9 Alva Street in 2017, intending to turn it into accommodation for those working on the hospital rebuild.
Housing workers had served the partners well during the Christchurch rebuild, so the group refurbished the boarding house in anticipation of an influx of construction workers.
The 780sqm house sits on a near-1600sqm corner section. Photo / Supplied
However, years of delays and cost blowouts have pushed the hospital’s two-stage construction well beyond the original timeline. And although the boarding house more than pays its way, Stewart and partners have decided they can’t wait for the restart promised by the Government for later this year.
“Unfortunately, it’s the game we’re in,” Stewart told OneRoof. “I’m just at that stage where I want to cash in. I still think there’s a great opportunity with the property, with those big old massive rooms, but I’m just getting to that stage in life where I want to slow down a wee bit.”
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Currently, Alva House is managed as a traditional boarding house. Stewart said it was still producing good cash flow. “We’ll still come out well on the right side of the ledger. That’s for sure,” he said.
He believed that Alva House could still end up as worker accommodation for owners who can wait for the next stage of the hospital project, the inpatient building, to resume.
The 780sqm mansion, which has a Historic Place Category 2 designation and an RV of $1.56 million, was built in the 1880s for an A.S. Paterson, who lived there until his death in 1940. Reports suggest the house was bequeathed to the Presbyterian Church and used as a training college for three decades.
The property was built in the late 19th century and was bought by the current owners in 2017. Photo / Supplied
Photos of the property show the magnificent panelled staircase and entry hall, and sitting rooms complete with grand fireplaces, stained glass windows, and ornate plaster work ceilings are all still intact, while the bathrooms and kitchen are clean and modern.
In his advertising for the property, which sits on a 1573sqm corner section, listing agent Jeremy Kelleher, of Kelleher Real Estate, said it featured 25 bedrooms, five bathrooms and shared kitchen facilities. It brings in a gross rental of just under $240,000 (including GST) a year.
Of his first foray into worker housing after the 2011 earthquake, Stewart said: “In Christchurch, we bought quite a few as-is-where-is properties right after. The first one was a three-bedroom house in New Brighton for $120,000.
“I remember my lawyer saying, ‘Look, you’re crazy buying this, there’s no insurance’. I’m thinking, ‘We’ve just picked up a three-bedroom house in New Brighton for less than land value’. I couldn’t see where you could go wrong,” he said, adding that the landlords who later came in for some bad press for housing three or more people per room had bought too late to make a profit.
- 9 Alva Street, Dunedin, is for sale by negotiation
