Central Hamilton is becoming a victim of its own resurgence with fewer smaller properties available for developers to renovate, according to Hatwell Properties owner Mark Hatwell.

The company has been busy rebuilding and extending the former Liquor King building at 164 London St into three tenancies.

The 2300 square metre property is undergoing a $1 million refit with design by Hamilton architects Edwards White, including ample parking.

Harcourts is currently seeking tenants for the revamped property.

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SUPPLIED There's been a huge amount of redevelopment in the last two to four years, says Mike Neale of Harcourts.

"We're building on spec. There is a demand for A-grade office space. However, the central city is short of sellers of sites," Hatwell said.

"People want top dollar even for empty buildings. Buyers wouldn't be able to get the investment back in rent so people are just holding on to property and hoping."

Harcourts managing director for commercial sales and leasing, Mike Neale, said the shortage of smaller buildings and sites came down to a "staggering" amount of redevelopment over the past two to four years.

"Vacancy rates have fallen, and with the low interest rates, long-term owners are either holding with existing tenants or prepared to wait through a period of some vacancy to get a significantly better return than the 3 per cent they would be getting in the bank.

"Sometimes a seismic strengthening issue often causes more elderly owners to consider selling."

On the residential front, Hatwell and local builder Bruce Turton of Tristram Development recently moved a large house from a 1800sqm section at the end of Domain View, overlooking Hamilton lake, and plans to build three four-bedroom townhouses with garaging.

SUPPLIED The London St property in central Hamilton being redeveloped by Hatwell Properties.

The site has panoramic views from the Hakarimata Ranges to beyond Pirongia. The first townhouse is expected to be completed late next year.

Meanwhile, Hatwell is waiting for a final decision from Hamilton City Council over the proposed Millennium Esplanade project before developing a 600sqm river-side block he owns.

The project is a pedestrian bridge linking Memorial Park and the central city first mooted nearly 20 years ago.

Hatwell said the property could make an ideal spot for a cafe or restaurant near the footpath that would connect the river from the museum to the planned new theatre on what is now the Hamilton Hotel site.

This would require a ramp, rather than the 100-odd steps in the existing footpath.