A brand-new, fully leased residential complex designed to tackle Auckland’s shortage of affordable rental housing has been put up for sale offering buyers a government-backed rental income.
Completed in 2021, the freehold property for sale near Manurewa town centre comprises two modern two-storey buildings together containing 26 one-bedroom units.
The complex is fully leased and managed on a single commercial lease to an established government-funded Community Housing Provider (CHP), offering buyers what commercial real estate experts say is a recession-resilient investment.
CHPs are not-for-profit organisations committed to boosting the supply of quality affordable, healthy housing options. By working with people on the Ministry of Social Development’s housing list who seek long-term affordable property, they offer an alternative to the public housing provided by Kainga Ora and local authority-managed housing services.
The property for sale at 41 Claude Road, Manurewa, comes with a new five-year lease to Penina Trust, the first Pacific-operated CHP. Established in 2001, Penina operates eight transitional and social housing facilities in Auckland.
The Claude Road property is being marketed for sale by Jean-Paul Smit and Mike Adams of Bayleys Auckland Central and James Valintine and Sunil Bhana of Bayleys South Auckland. Sale will be by way of a tender closing on Thursday 9 December, unless it sells sooner.
Mr Smit said Penina Trust’s “semi-gross” lease, would provide a new owner with Government-backed rental income of $557,700 per annum.
“The current lease runs through to 2026, with two further five-year rights of renewal. The lease agreement includes annual CPI rent reviews, replaced by a market review every fifth year,” said Mr Smit.
Mr Valintine said the complex sat on a 1,526-square metre freehold site, zoned Residential – Mixed Housing Urban under the Auckland Unitary Plan.
“Each unit is fully self-contained with a kitchen, bathroom and shower, bedroom and living room. Units on the ground floor enjoy a private courtyard area while the upper-level units have access to their own balcony.
“The site presents well with low maintenance brick construction, car parking, a bike shelter, walkways, lawn and gardens,” said Mr Valintine.
The tenant, Penina Trust, occupies one of the units as its site office, and is responsible for utility costs as well as all interior and exterior maintenance of the property.
Mr Adams said the Manurewa property represented an opportunity to invest in a high-growth area which is experiencing a period of rapid development and rejuvenation, especially in the town centre.
“Located about a kilometre west of the property for sale, Manurewa town centre caters to a huge catchment. It offers a range of convenience shopping with more extensive shopping available at Southmall Shopping Centre,” said Mr Adams.
Also nearby are a range of schools, public transport options including the recently upgraded Manurewa train station, and State Highway 1 motorway access.
Mr Bhana said population and market trends would underpin future demand for affordable housing in the region, along with ongoing funding from the Government.
“Steady growth in Auckland’s population, combined with the growing gap between supply and demand for flexible, affordable housing, point to an enduring need for this residential model.
“The chronic shortfall of affordable and social housing will likely see this part of the market experience persistent demand growth, which in turn necessitates continued public funding, for the foreseeable future,” said Mr Bhana.
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