On the way: An artist's impression of a new housing development on the corner of Queenstown's Gorge Road and Hallenstein Street

Frankton’s Five Mile developer Tony Gapes has released plans for a new central Queenstown housing development.

He’s planning an innovative housing development called ‘Alexis’ on a vacant 1715 square metre Hallenstein Street site bounded by Gorge Road’s Pedro’s House of Lamb on one side, and Queenstown Bible Chapel on the other side.

Part of the fast-tracked Gorge Rd special housing area, Alexis comprises 32 multi-level two- and three-bedroom homes.

The two-bedroom, two-level terraced units are 90sqm, while the three-bedroom, three-level terraced units will be 130sqm.

Significantly, the three-bedroom units can be separated into a two-bedroom residence with a self-contained one-bedroom apartment below.

Bayleys Auckland salesperson John Greenwood says the Alexis homes deliver solutions to both the cost of homes for first-home buyers or young families, and the shortage of short-term rental accommodation.

“Firstly, it enables first-home buyers and young families to purchase a new home with rental income directly attached, in a property that can be later reconfigured as the family grows.

“Secondly, it provides brand-new high-quality rental accommodation for the region’s workforce.

“The flexibility of the three-bedroom units enables young couples or first-home buyers to live in either the self-contained apartment or the two-bedroom unit and rent out the other portion of the property to derive income which can assist in paying off their mortgage quicker.”

They’re not cheap though.

The two-bedroom units are priced from $785,000, and the three-bedroom residences are priced from $945,000.

Four apartments have sold already with another 10 under contract.

Bayleys Queenstown’s Jimmy Allen says the two-bedroom units will most likely be bought as investment properties.

According to Queenstown Accommodation Centre, one-bedroom units in this locality could generate rental income of $465 a week, while two-bedroom units could generate $630.

“From a pure investment perspective, the three-bedroom-configured homes offer a yield potential in the order of six per cent,” Allen says.

“That’s two points more than most residential rental yields.”

The two-bedroom apartments will sit above six retail sites.

Greenwood suggests these will be suitable for cafe and food offerings or the likes of health and beauty spas and hair salons.

Construction’s due to start in the middle of this year for completion in the third quarter of next year.

The development will be the first in the council-initiated Gorge Rd SHA, which was approved by the government two years ago.

Aucklander Gapes bought the L-shaped site last year from a subsidiary company of Fletcher Building.