A stately mansion in New Zealand that featured in two “Lord of the Rings” films hit the market earlier this month with a US$5.2 million price guide.

The 27-acre estate, called Fernside, comprises a grand main residence, a guest cottage and storybook grounds, including a picturesque lake. It played a pivotal role in two of the franchise’s films: “The Fellowship of the Ring” and “The Return of the King.”

Director Peter Jackson used Fernside in South Wairarapa on the North Island for several key scenes due to the whimsical grounds and his personal connection with the region. In fact, the Oscar-winning filmmaker lives just down the road.

The lake was transformed into Silverlode River where Cate Blanchett’s character Galadriel farewells the hobbits and is also the fateful place where Smeagol, played by Andy Serkis, discovers the “precious” ring. During filming more than two decades ago, some of the cast members, including Orlando Bloom and Elijah Wood, reportedly even stayed at the homestead.

The sellers, a private family who didn’t own the property at the time of filming, have revived the significant estate since purchasing it in 2007 for NZ$5.06 million (at the time US$3.84 million), according to CoreLogic NZ.

The work done to the home included restoring the original gardens, adding bridges and jetties around the lake and painting the house, as well as fixing up the derelict cottage. Built for a wool baron in the mid-19th century, the main house was later destroyed by fire. The property was entirely rebuilt in the 1920s for Charles Elgar, chairman of the New Zealand Red Cross during World War I. By 1945, the property was sold to the U.S. embassy and used as the ambassador’s residence for 10 years, according to the listing agent and public information about the property.

The neo-Georgian–style homestead features a drawing room with sunroom and terrace, formal lounge and dining rooms, as well as a grand kitchen with scullery. Upstairs there are five bedrooms with en-suite bathrooms plus three more bedrooms in the original staff quarters.

The next owners could use the property, listed with PQ Property Intelligence, an affiliate of Forbes Global Properties, for many different purposes, said PQ managing director Anthony Morsinkhof.

“This is one of the most significant properties in New Zealand. Its gardens are mind-bogglingly beautiful, the photos just don’t do it justice. I haven’t seen anything like it, and I sell a lot of real estate,” he said.

Mr. Morsinkhof said the unique property is perfectly suited for an events or hospitality business.

“The bedrooms are grand and beautifully fitted out, it’s already got a commercial kitchen so it could easily be turned into luxury accommodation or a healthcare retreat,” he added. “And it’s ideally located in one of the most up-and-coming areas in New Zealand for tourism.”

Several themed gardens include an entrance courtyard with fountain, rose beds, box hedging, a tennis court garden, scented walk, daffodil paddock, bluebell glade, green houses and sunken garden. There is also a woodland, large main lawn, goldfish pond and the silver screen-worthy lake.

The meticulous restoration put Fernside on the map as a garden of national significance. The private orchard produces varieties of apples, pears, peaches, plums, figs, avocados and an array of citrus trees. The gourmet garden also produces walnuts, hazelnuts, almonds, mulberries, strawberries, blackcurrants, blueberries, gooseberries, raspberries, boysenberries—and, of course—kiwifruit.

While the owners have entertained weddings, society events and even “Lord of the Rings” tours at their property, they said its future potential depends on the motivations of the next owners.

The Wairarapa region is predominantly rural, but dotted with several towns including Masterton just 30 minutes from Fernside with an airport catering to private aircraft. Wellington International Airport is approximately one and a half hours away by car.

“You’ve got everything at your fingertips; the mountains, beautiful rivers and amazing beaches, as well as upmarket restaurants and boutique shopping,” Mr. Morsinkhof said.

“I often refer to it as the Hamptons of New Zealand. There are a lot of high end properties in the area, and it attracts Wellingtonians looking for second lifestyle homes. A lot of film industry people call the area home too; [Mr.] Jackson has a place nearby, so does James Cameron, Richard Taylor and Tania Rodger from Weta Workshop (design studio). So there’s already significant international money in the region.”