An entire residential development fully tenanted by an iwi-backed lease arrangement presents dual benefits for passive investors seeking a steady income stream with future flexibility, Bayleys salespeople say.

Bayleys Napier Investment, Commercial and Projects director Kerry Geange is marketing the 3,518sqm (more or less) freehold site at 1018 Plunket Street, alongside colleague Jodie Woodfield.

The property features in Bayleys’ latest Total Property portfolio and is offered for sale by deadline, closing at 4:00 pm on Friday, 29 November 2024 (unless sold prior).

“Positioned on a prominent site at the junction with Stortford Street just five minutes from St Leonards Park, the asset comprises 15 two-bedroom townhouses built in 2022 with 16 marked car parks, all leased to a sole iwi tenant - Te Taiwhenua o Heretaunga.

“With the entity assuming responsibility for vacancy and management risks, the development offers the stability of long-term tenancy, underscored by a five-year lease to October 2027 and options for two further three-year renewals, ensuring continued returns and growth opportunities.”

The property returns a net income of approximately $426,582 plus GST, with annual adjustments tied to the Consumer Price Index (CPI) and a market rent review upon lease renewal in 2027. Geange says this structure delivers an appealing blend of stability and growth, making the property a valuable addition to any investment portfolio.

Totalling 1,118sqm (more or less), each of the approximately 75sqm townhouses is nearly identical in configuration, with storage areas, clotheslines and courtyards. Bayleys Napier salesperson Jodie Woodfield says that the quality of the build, which adheres to government-approved standards and is constructed from low-maintenance, durable materials, provides reassurance about the longevity and durability of the asset.

“Each townhouse has been designed to comfortably accommodate tenants, with private amenities and on-site facilities including management, fibre connectivity, and rainwater detention tanks supporting a modern and efficient living environment.

“An added layer of potential for the investment lies in the recently granted resource consent for unit title subdivision, which would allow the property to be restructured into six separate titles. This flexibility introduces opportunities for diversification down the track, enabling investors to either retain the entire development as a single income-producing asset or consider future staged sales of individual units.”

Located adjacent to an established residential community and light industrial services, the property is proximate to key services, including the regional hospital, supermarkets and the Hawke’s Bay Expressway.

Woodfield says this connectivity enhances the property’s appeal for tenants, adding to its long-term value. “A setting in the heart of a growing residential area provides an attractive solution to demand for high-quality social and conventional housing, offering confidence to prospective purchasers looking to secure a valuable property asset.

“With a stable net income, a secure single-entity lease, and built-in rental growth, this property is poised to attract passive investors seeking dependable returns from a high-yield asset in a location demanding more housing. The micro-community delivers a complete package – high-quality, low-maintenance housing, minimal vacancy risk and future flexibility through subdivision potential.”

Click here for more information on the listing.