Classic Onehunga character offers a live and work situation

The apartments in the Trafalgar St building have been refurbished and the whole building has been upgraded and repainted. Photo / Supplied

One of Onehunga's classic character buildings with a long leasing history on its high-profile corner site at the gateway of the suburb's main thoroughfare, is up for sale by tender.

The freehold, standalone building on the corner of Onehunga Mall and Trafalgar St has five shops on the ground floor and three residential flats upstairs, all of which have been occupied for some time, says Cameron Melhuish, who is marketing the property with Bayleys Auckland colleague Alan Haydock.

The two-level north-facing building at 163-171 Trafalgar St was constructed in the 1930s in stucco-cement and brick exterior walls, with wooden window frames, and more recently has been refurbished with gib board and solid plastered interior linings.

The three apartments have been refurbished and the building has recently undergone an upgrade which has included some rewiring, installing individual water meters to each apartment and a complete repainting of the exterior.

While it does not have any historic classification as such, the building is one of Onehunga's original properties and provides an approximate floor area of 450sq m over its 321sq m site. The shops range in size from 35sq m up to 60sq m. Upstairs, the three 75sq m flats are spacious and light, Melhuish says.

Retail tenants include a hairdresser, a clothing store and a shop that sells and repairs mobile phones on varying lease terms of up to five years.

The property produces a net annual rental income of $116,181 and there is potential for rental growth if the shops were refurbished to a higher standard when tenants' leases expire, Melhuish says.

Directly opposite the building, Retail Solutions, developers of the successful 70-store Dressmart complex off Onehunga Mall, are building an eight-shop complex which has attracted national tenants such the Mad Butcher, Liquor King and the Cheesecake Shop, which will move in once the shops are finished.

This new complex may raise retail rental rates in the area once completed, says Melhuish.

Dressmart alone brings approximately 1.5 million people into Onehunga each year and the suburb has traditionally shown little vacancy in its commercial core and has proved almost immune to recent difficult economic times in terms of vacant space, he says.

"The Onehunga business community services surrounding residential areas such as Royal Oak, One Tree Hill, Mangere Bridge and Hillsborough.

Within this radius there are excellent community facilities that attract many families looking for affordable suburban living, yet with easy access to the city, airport and southern motorways. It also offers good employment opportunities with the Penrose/Onehunga industrial areas close by.

"With a vibrant commercial core, and a flourishing business association which meets regularly to develop and promote businesses in the town, the suburb has proved very popular with investors. As a consequence investment properties here are very tightly held and rarely come up for sale on the open market."

Most of the residential tenants in the building are locals who live and work in the area, says Melhuish. "Anecdotal evidence suggests that the building has had a good occupancy level for this reason. The suburb has all the right shops, from supermarkets to clothing and other utility stores within walking distance."

Haydock says the Trafalgar St property offers an ideal passive investment for someone looking for good cash flow, a diversified risk with multiple tenants and rental growth potential. It is also in a high-profile location on a very busy thoroughfare.

"It's in a strategic north-facing corner position with high exposure to Onehunga Mall which is the main thoroughfare into the Onehunga town centre and which carries a substantial amount of traffic."

Tenders close on Tuesday March 23.