A gun was found at a separate location and police said the firearm was connected with the homicide.
"It is pleasing to make an arrest at this early stage, however there are still [people] we need to speak to and to establish who is responsible for the death of Mr Watkins," said Detective Senior Sergeant Warwick McKee.
He earlier said police were speaking to people from the house where the man's body was found.
"This is a busy street and there were a lot of vehicles and persons around the area at the time," said Mr McKee, from the Wellington District Criminal Investigation Branch.
He urged people who observed the incident near the Taita shops or saw any suspicious activity to contact police.
