The opportunity to acquire a landmark property in Manurewa, with a strong income stream from 15 individual residential units, is on offer through CBRE.
The property, at 25 Montilla Place, South Auckland, was originally built in 1914 as an orphanage and is now divided into 15 units.
CBRE brokers Deborah Dowling and James Lee are handling the sale on behalf of the current owner who is moving overseas, via a deadline private treaty campaign closing on September 26.
The fully tenanted asset offers investors exposure to the sought-after living sector of the property market, with the additional benefit of a large 4,970sqm freehold land holding and scope to develop additional units.
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“This is a substantial investment property in the living sector, which is becoming highly desirable among commercial investors searching for income diversification,” said Dowling.
The property is currently rented at below market rates, which together with the development opportunity offers plenty of scope to enhance future income.
“The property’s existing units are considered under-rented relative to market levels, which creates immediate possible upside. The potential to build up to six new townhouse-style homes at the rear of the property is also an option to generate additional return.”
Other options the purchaser could consider include converting the property to an alternative use; for example retirement, medical, boarding house, educational, community or church use, she said.
The Georgian Revival-style building was originally constructed in a rural setting as one of three orphanages in Auckland, making it part of the fabric of the city’s history.
The orphanage, known as Manurewa Children’s Home, was built in response to crowded conditions at the Remuera Children’s Home in the early 1900s.
It originally had dormitory accommodation, along with recreation rooms, several bathrooms, kitchen and dining areas, staff amenities, a medical care area and outdoor play spaces. At its peak, the property housed over 300 children.
The orphanage ran successfully until 1989, when the Children, Youth and Families Act moved to put children in private foster care instead of orphanages. The home was closed and the building was converted for use by a church-based community organisation.
It was later converted again into the current configuration of residential units of between one and six bedrooms.
The tidy and well-maintained units are spread across two levels within the building’s three wings, oriented to the north-west.
All the units meet current healthy homes regulations and have individual heat pumps and ventilation systems.
Weekly rentals range between $400 and $800, providing a total annual income of $427,960.
The strong return derived from the living sector, together with the potential to strengthen the property’s income, is expected to generate widespread interest, says Lee.
“The living sector is a rapidly-emerging focal point within the commercial real estate market. Investors are increasingly turning to this growing sector, which offers strong fundamentals as population growth continues and home ownership affordability challenges push more people to the rental market.”
CBRE Research’s September 2024 Asia Pacific Living Sector: Case for Investment report found that the rental housing/multifamily investment category is now the most preferred commercial real estate sector for investment in Asia-Pacific, ahead of industrial & logistics and office property.
It also shows that the ratio of median private housing prices to annual household income in 2023 was higher in New Zealand than in the UK, Australia and the US, he says.
“Several factors point to increasing demand for rental property, both in New Zealand and across the Asia Pacific region. As a result we are already seeing strong interest emerging in several living sector investment categories including build to rent and multifamily assets, as investors look to diversify their sources of income.”
The property is well located in Manurewa, which provides multiple employment opportunities in the nearby suburbs of Wiri and Papakura as well as the steel mill at Glenbrook.
Local amenities including schools, leisure centres, Southmall and supermarkets are nearby, as well as Manurewa Station and buses within walking distance.
- Supplied by CBRE
