Brand-new passive investments on offer in Manukau

A number of brand-new, high quality accommodation offerings in Auckland’s growth region of Manukau to go under the under the hammer next month are set to be in high demand given Auckland’s chronic housing shortage, brokers say.

Eight fee simple detached buildings and eight freehold unit title properties in four different locations will be sold as 16 individual lots at Colliers International’s CBD auction rooms from 11.30am on Tuesday, 22 March.

Colliers’ South Auckland Investment Sales Manager Jeremy Barnett who, with colleague Jasmine Yao, is marketing the properties says this is a rare opportunity for purchasers to secure a strong, passive accommodation investment.

“Given limited land supply in Manukau, this offering would be extremely hard to replicate and due to Auckland’s housing crisis, accommodation such as this is extremely sought-after by both tenants and purchasers.

“Auckland Council’s Housing Project Office estimates that the housing crisis is still yet to peak, with the city’s shortfall projected to reach 25,000 homes in 2018, compared to current levels of roughly 15,000, and not return to the 15,000 level until 2025.”

Each address has been strategically chosen for their location around both Middlemore Hospital and Auckland Airport, attracting high quality tenants including doctors, nurses and flight crew, Barnett says.

“The newly-built properties already demonstrate high occupancy levels, showing a solid return of over $100,000 net per annum for each individual lot.”

Built by Jennian Homes of brick and palisade, no expense has been spared by the developer in order to achieve the best quality, Yao says.

“These properties are quite unlike anything currently seen on the market.”

The accommodation offerings are made up of a total of 16 titles: four fee simple two-storey detached dwellings at 59-61 Gray Avenue, Mangere East; six freehold unit titles at 64a Rosella Rd, Mangere East; four fee simple two-storey detached dwellings at 41-43 Plunket Ave, Papatoetoe; and two freehold unit titles at 257 Puhinui Rd, Papatoetoe.

The gross floor area for each lot ranges from 240sqm to 590sqm, Yao says.

“Each of the properties has secure carparks on site for residents and full CCTV security cameras operating 24/7, as well as swipe card access.”

The properties allow for multiple income streams, by way of charges for rent, parking, internet and laundry, Barnett says.

“The Gray Ave properties generate $103,825 net income per annum per building, the Rosella Rd properties return $103,825 net income per annum for the larger buildings and $91,274 for the two smaller buildings, and the Puhinui Rd properties generate $103,825 net income, while the Plunket Ave properties return $116,365 net income per annum per building.”

“The properties are a mixture of seven to nine bedrooms ranging in size from 20 to 24 sqm and each with their own en-suite, and common facilities, including kitchen and laundry.”

Another key drawcard is that each of the investments is sold complete with high-quality chattels, Yao says.

“The rooms each have an excellent fit-out, along with brand new chattels such as a queen-sized bed, bar fridge, television, coffee table, bedside table, chairs and wardrobe in each room.”

Further underpinning the passivity of this investment is the fact that all properties are managed by a full-time property manager, Barnett says.

“With all the fundamentals in place – such as the strategic locations, top quality build and strong tenant covenant – these properties constitute the ideal ‘hands-off’ bottom-drawer investment opportunity.

“The property manager, StudioHomes, manages an extensive portfolio of high-quality fully furnished rental accommodation for professional singles or couples, hospital workers, students as well as the general public, meaning purchasers can be assured their investment is in safe hands.”

The Papatoetoe properties’ current zoning under the District Plan is Main Residential, which permits a range of uses, including residential, childcare services and facilities for up to 10 children, community and health care services and facilities, to name a few, Yao says.

The Mangere East properties’ current zoning under the District Plan is also Main Residential, allowing for childcare services and facilities for up to 10 children, external additions or alterations of existing buildings, and more.

The properties’ location is a key aspect to the strong tenant covenant, Yao says.

“The Gray Ave and Rosella Rd properties are less than five minutes’ walk from the hospital, and all properties are less than 15 minutes’ drive away from the Airport – attractive to professional tenants who work nearby.”

The properties are all close to public transport, including bus and train routes, and only minutes from the Southern Motorway, Yao adds.

“Manukau’s excellent motorway access has helped it become one of the most popular commercial areas in Auckland containing a well-rounded mix of occupiers and a full-service town centre that serves a large and growing surrounding population.”

With a shortage of both residential and commercial property in central Auckland, Manukau is tipped to soon undergo further rapid expansion, she says.

“The Government has also demonstrated acknowledgement of Manukau as a growth region, with work starting this year on the Manukau Bus Station, which when completed will be at the heart of a new public transport network for south Auckland.”

The Auckland Transport project, which will cost $26 million to construct, is funded by the Government through the NZ Transport Agency and Auckland Council. Construction of the bus station building is expected to be completed in the second half of 2017.

The NZ Transport Agency’s Auckland Regional Director, Ernst Zöllner says the Manukau Station upgrade will give people better access to jobs, education and housing, as well as more choice about how to get around Auckland.

“Manukau and South Auckland will play a vital role in Auckland’s economic growth, and the Government, through the NZ Transport Agency is committed to providing transport solutions that support growth and productivity.”


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