Room to grow Papakura childcare investment
Societal changes, population growth and government subsidies are some compelling factors underpinning the private early childhood education and childcare sector in New Zealand. This is fuelling investment interest in properties tenanted by providers of these services.
A fully-leased purpose-built early childcare facility on the corner of Great South Rd and Butterworth Ave, Papakura, has been placed on the market and is attracting strong inquiry.
Marketed by Tony Chaudhary, Amy Weng and Janak Darji of Bayleys Manukau, the land and buildings at 336 Great South Rd will be sold by deadline private treaty closing 12pm, Thursday 1 July, unless sold prior.
The freehold 1419sq m site supports a modern, multi-level and low-maintenance building with 511sq m floor area, along with 425sq m landscaped and functional outside space with an enclosed deck, secure perimeter fencing and sealed carparking for 17 vehicles on the eastern boundary.
The residential-style building has three separate play areas, sleeping rooms, children’s bathrooms and kitchen on the ground floor, with staff amenities and storage on the upper level.
The property was purpose-built for the national tenant Kids World Childcare Papakura Ltd, trading as All About Children Childcare, and the facility is licensed for 85 children.
It returns $243,100 per annum plus GST and outgoings and the lease is structured for assured rental growth. The 15-year lease commenced in 2018 and has rights of renewal until 2053. Rent is reviewed annually to the Consumer Price Index.
Chaudhary said the property is located within an evolving residential catchment that is seeing greater intensification as Auckland’s population continues to grow.
“Papakura and its surrounds offers one of the largest population catchments in the Auckland region and, given the push for higher residential density, the need for accessible childcare services will be heightened,” he said.
Along with changing workforce trends which are driving the sector at a wider level, the tenant’s long lease and its proven operational model, makes this a desirable passive investment for a long-term hold.
“Out-of-home childcare is increasingly required these days with both parents often working and families becoming more fragmented geographically.
“The demand for a facility such as this will continue on the back of the rise of the doubleincome household,” he said.
“Additionally, the childcare sector tends to be defined by longer leases and in this instance, most of the outgoings are the tenant’s responsibility which further enhances the appeal for a passive investor.”