Modern, well-tenanted rental units an investor's buffet

Multi-level units at 3, 5 and 7 Knox St, Hamilton, offer modern, centrally located accommodation. Photo / Supplied

Seven multi-tenanted accommodation complexes that are in receivership comprise a total of 149 rental units located in Hamilton, New Plymouth and Palmerston North, and are featured in Bayleys' latest Total Property portfolio.

Five of the complexes are in Hamilton and are being sold by tender, closing on July 1, though Cameron Melhuish of Bayleys Auckland and Stephen Shale of Bayleys Hamilton.

Three multi-level accommodation complexes at 3, 5 and 7 Knox Street, Hamilton have 34 one-bedroom residential units, typically producing $305 a week, and 42 studio units renting for around $200 per week. Adjoining properties, the complexes each have their own titles. Melhuish says they are well known for offering some of the most modern and centrally located accommodation in Hamilton. "The city centre is just a short walk away as are a range of other amenities. Consistently high occupancies are enjoyed which has helped underpin rental levels."

Two neighbouring complexes at 2 and 4 Vine St, near Waikato University and the Hillcrest Shopping Centre, each with residential units in a pair of American college "fraternity house" style buildings, have occupancy rates above 85 per cent and an average room rate of $190 per week.

Melhuish says the accommodation units have been trading well since being placed in receivership at the end of 2008.

The units are rented by a wide variety of occupants - including university students and other tertiary education users, people on secondment, young business professionals and those new to Hamilton seeking rental units before buying their own property. Also part of the portfolio is a property containing 16 three-bedroom townhouses in New Plymouth, each returning an average rental of $475 per week with mainly professionals as tenants. The offering also provides the opportunity for an investor to unit title the townhouses for sale individually at a future date.

The remaining property is an extensive accommodation complex in Palmerston North encompassing 24 studio units renting for an average of $190 per week, 12 self-contained studio units for $225 per week and a five-bedroom home occupied at $450 per week.

"The portfolio can be sliced up in numerous ways," Melhuish says. "One investor could buy the entire seven properties as one business, or individual buyers could purchase one or more of the individual properties. There is the potential within some of these listings for a new owner to comfortably live within the premises while continuing to operate them as commercial accommodation."

Melhuish says Bayleys has already been talking to several large corporate investors about the portfolio. "While the size of these properties may be beyond the realm of someone wanting to invest in a three-bedroom house or block of two bedroom flats, they do fall within the budgets of small to medium-sized investment portfolios. We have also had inquiries from offshore."