Established tenant underpins Orewa childcare investment
A leading early childhood education centre in the high-growth region of Orewa presents prospective purchasers with the opportunity to acquire a premier bottom-drawer investment with an established tenant on a longterm lease.
46-48 Centreway Rd, Orewa, is home to a
660sq m building on a 1909sq m freehold site zoned Business–Mixed Use under the Auckland Unitary Plan.
The property is tenanted by Educare Orewa, one of 23 Educare early learning centres across New Zealand.
The centre is consented for 105 children and Educare has a 15-year lease with further rights of renewal providing $327,589 plus GST and operating expenses in annual rental income.
Alongside the childcare centre, the property offers an outdoor play area as well as 24 dedicated carparks.
Colliers directors Shoneet Chand and Matt Prentice are marketing the property for sale via deadline private treaty closing at 4pm on Tuesday 13 September, unless sold prior.
Constructed in 2017 by experienced early childhood education centre developers Signature Homes, the well-maintained property enjoys favourable proximity to Orewa College, Orewa Beach, and the town centre.
Educare’s current lease runs until 2032, while there are two further rights of renewal for 10 years each leading to a final expiry of 2052. The lease also includes fixed annual rental increases of 2 per cent and market reviews every five years.
Chand says the property has a strong tenant covenant underpinned by an experienced industry provider.
“Educare are a proven childcare centre operator with locations in Whanga¯rei, Auckland, Waikato, Wellington and Christchurch,” Chand says.
“The lease terms on the property are incredibly appealing for buyers given the annual rental increases and five-yearly market reviews, which should lead to ongoing rental growth.”
Prentice says the childcare sector is a sought-after asset class among investors. “Childcare centres are tightly held and always draw considerable interest when presented to the open market given the strong investment fundamentals on offer.
“The early childhood education sector in New Zealand benefits from substantial Government support.”
Prentice says Orewa, which has picturesque views and popular local hospitality spots, is an area that is continuing to experience ongoing growth.
“Orewa’s population topped 10,000 at the last Census in 2018 and the fastest growing demographic among residents was in the 25 to 34-year-old category.
“Previously Orewa was known for being predominantly a retirement community and holiday destination. However, improvements in motorway access and the recent development of park and ride facilities in the adjoining township of Silverdale means that Orewa is now a convenient commuter suburb.
“The Northern Motorway section of State Highway 1 passes just inland of Orewa, while upgrades to the main road and the widening of the footpath have reconnected the town with the beach.”
The Business–Mixed Use Zone is typically located around centres and along corridors served by public transport. The zone provides for residential activity as well as predominantly smaller scale commercial activity that does not affect the function, role, and amenity of centres.