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At least six parties are in negotiations to potentially buy the Hotel St Clair in Dunedin.
A key component of any sale could possibly be redevelopment of a separate hotel-owned house property, next to the hotel on Beach St, which could be demolished to make way for an extension of 12 to 15 rooms.
Barry Robertson, of Colliers in Queenstown, who had extended the tender time to Friday last week, said there were in total 28 ''firm inquiries'' for the hotel, which carries a $6.85 million capital value.
Mr Robertson said 11 parties had gone on to sign confidentiality agreements, to assess the hotel's financial situation, and there remained six entities ''still in talks''.
He said the adjacent Beach St residential site was attractive to some parties for development, which Colliers was at present ''quantifying'', and which could allow the 26-room, three-storeyed hotel to become a 38 to 41-room facility.
The Esplanade block area has been rezoned for 11m-high structures as of right.
Mr Robertson said of the six parties, there was one international, already with interests in Dunedin, people from Christchurch and Auckland, as well as two hotel chains.
''We're looking at pulling together parties for a deal, where one party would take the whole deal,'' he said.
He said while an outright sale was preferred by the family-owned Calder Stewart business group, which co-built, owns and operates the hotel, some parties wanted to lease and operate the premises, which could be an option for an outright buyer.
Mr Robertson said the hotel, since opening in 2009, had returned annual occupancy-rate growth. It is understood to have a total valuation of about $10 million.