The large, undeveloped lot has been approved for the next stage of the partially-completed residential development on the former Murrumbidgee Mill site.

The large-scale commercial and residential development of the block includes a Holiday Inn currently under construction and The Mill apartment complex that opened in 2016.

The site comes with approval for a 69-room apartment complex comprised of a mixture of one, two and three-bedroom flats with groundworks already in place.

Raine and Horne's Craig Tait, who is managing the sale, said the site attracted strong offers on its initial listing, but so far the ongoing lockdown has gotten in the way of securing a sale.

"We had some developers from Sydney who were pretty keen on it but they've had a few issues with COVID - they've got 35 sites and 32 of them were shut down under the lockdown so they had a pretty massive impact from that," he said.

"So they've withdrawn from purchase and we've got it marketed for sale again."

The land and approved development is expected to fetch a $2.1 million price tag.

Owner of the block, Yu Xiao is also the developer of the Holiday Inn project and was initially seeking to offload the second residential development to focus on the commercial project.

Mr Tait said despite the live listing however, with increasing demand for apartment living in Wagga the development may go ahead without a sale.

"The owners are considering doing the development themselves," he revealed. "... They're probably in two minds as to whether to sell or just hold it and complete the development when the hotel is completed."

The existing Mill apartment complex on the site has experienced some issues with maintaining tenants in commercial spaces on the ground floor since opening in 2016.

In 2018, one business who shut up shop after just 18 months confirmed a lack of foot traffic at the time they closed] was behind the decision.

Mr Tait said however that once the site has the second residential development and the Holiday Inn completed, it will be an attractive precinct both for residential tenants and commercial.

"There has been pretty strong demand for apartments in the CBD and the last couple sold really well," he said.

"There's just not much available close to the CBD and if someone did this development here they would sell really well particularly with what's going on in the area."

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