With significant investment by large industry players in the Onehunga housing market and a focused push on upgrading streetscapes and public spaces, commercial property in the high-growth area is attracting attention.

Investors are scoping well-positioned properties with good cashflow, and doubling down on those sites with development-intensive zoning, say agents marketing a high-profile “set-and-forget investment” with sound underlying zoning on major arterial Onehunga Mall.

A significantly upgraded and refurbished 1960s’ two-level fully-leased building at 100-percent new building standard set on a 1,624sqm freehold site at 364-368 Onehunga Mall, returns net annual income of $194,728 plus GST.

Established anchor tenant Nurture Early Learning has operated from the site for a decade and recently exercised its right of renewal early, committing to the site for a further 10 years. Nurture is family owned and operated and also has centres in Avondale and Red Beach.

The second tenant is music studio Dream Studios Limited, which occupies space on the first floor in a self-contained tenancy that has a separate entrance to the northern side of the building.

In total there is approximately 935sqm of lettable building area and the site has 21 sealed car parks.

The property is for sale by tender closing Tuesday 11th March, unless sold prior by James Were and Cameron Melhuish of Bayleys.

Although performing well in its current guise and having strong tenant commitment, Were says the development-intensive zoning underlying the property will give prospective buyers confidence for the future and they can be encouraged by other investment in the suburb.

“A portion of the site is zoned Business Neighbourhood Centre, a largely-commercial overlay, and part is zoned Residential – Terrace Housing and Apartment Building which allows intensification.

“Onehunga has seen robust growth and transformation in recent years, and higher density residential projects have boosted housing supply which in turn supports commercial activity in the area.

“The subject property has all the hallmarks astute investors demand – location first and foremost, split-risk with two tenants, well-structured leases, built-in rental growth and sound underlying zoning credentials.”

Population growth and the increase in dual-income families is underpinning demand for childcare and early childhood education provision and Were says the proven occupier Nurture Early Learning’s commitment to the site for a further 10 years shows the value they see in the area’s large residential catchment and reflects on-going demand for its services.

“The Onehunga centre is licensed for 75 children and has children enrolled from Onehunga, One Tree Hill, Royal Oak, Hillsborough and Mangere Bridge.

“As housing supply in Onehunga increases, demand for early childhood learning services will also rise. This is seen as a defensive asset class given its resilience through market cycles, and projected demand driven by changing demographic and social dynamics.”

Melhuish points to proactive development in Onehunga by some of Auckland’s best-known entities as supporting the town centre's growth.

“Precinct Properties is making a big push into multiunit residential living across Auckland and is behind the Onehunga Mall Club, a new residential apartment tower where the Onehunga Workingmen’s Club once stood, and Fabric², which Precinct says brings fresh vision to the iconic neighbourhood.

“Ockham Residential’s Manaaki development has 210 apartments across four buildings and also aims to redefine living in the area.”

Auckland Council has a wider urban regeneration plan for Onehunga which includes improved pedestrian connectivity and new public spaces.