Encompassing 440 sqm of land with future development potential at 227 West Tamaki Road, Glendowie, on the corner with Taniwha St, the offering comes with a 10-year lease until mid July 2026 to Glendowie Montessori Pre-School.
Currently generating net annual rental income of $80,483 plus GST, the property will go up for auction on Wednesday, September 15, unless sold prior. It is being marketed by Bayleys Auckland agents Phil Haydock and Natasha Christensen.
“Savvy investors with an eye to the future should investigate this investment opportunity,” says Phil Haydock. “It would provide an excellent entry into the commercial property market or addition to a portfolio, providing diversification into the popular early child education investment sector.”
Haydock says Montessori is one of the longest established names in early education in New Zealand and currently has close to 200 learning centres throughout the country.
“In addition to its well-established tenancy, the property is underpinned by a Neighbourhood Centre zoning which permits, low rise mixed-use development. It is also located in a highly sought-after growth area, set to benefit from the largest urban renewal project in New Zealand, the Tamaki Regeneration Programme.”
The single-storey building located on the property was originally built in the 1960s as a Post Office but more recently has been completely renovated and extended for use as a pre-school centre. Approximately 150sqm, it comprises attractive open plan classrooms, a private office, toilet facilities and a kitchen.
A modern wooden feature façade has been added to the mostly concrete constructed building, with a sizeable outdoor play area located on the remaining half of the site. There is a service lane, accessed off Taniwha St, running along the back of the property which also provides rear access to neighbouring commercial premises.
The centre is licensed for 37 children. Phil Haydock says the well-structured lease includes fixed annual rental increases based on the Consumer Price Index (CPI) plus market reviews on renewal. There are four five-year rights of renewal following the initial lease taking the final expiry to July 2046.
“At around $42 per child per week, the current rental is below comparable Auckland child care centres which means there could be a significant upside adjustment in income when it comes up for its first market review. In the meantime the new owner will benefit from the annual CPI indexed increases.”
Natasha Christensen says the property is located in a highly sought-after residential area close to the waterfront, with its corner position providing good exposure to passing traffic. It is situated at the end of a block of adjoining retail premises on West Tamaki Rd which include a superette, hair and beauty salon, a café and bakery and a physiotherapy practice.
The Business - Neighbourhood Centre Zone zoning applies to small shopping strips located in residential neighbourhoods and is designed to cater for frequent retail and commercial service needs of residents and passers-by.
The zoning allows for development of up to 11 metres height plus a 2-metre roof form. “This means any future development of the site could potentially encompass buildings of up to three storeys with residential accommodation allowed on upper floors provided it is in keeping with the surrounding residential environment,” says Christensen.
“The property’s building footprint in any future development could be extended to utilise as much of the full site as possible, with a commercial use on the ground floor complementing the neighbouring retail premises and residential above.
“Increasing the property’s longer-term appeal for residential use is its proximity to Wai o Taki Bay and the Tahuna Torea nature reserve on the Tamaki Estuary which are a short stroll away. Also given the site’s elevated position, it might be possible to design some of upper-level apartments to make the most of waterfront views.”
Christensen says Tamaki is undergoing a massive 25-year regeneration project focused on housing (with 10,500 new homes planned), health, transport infrastructure improvements and economic development.
“This is resulting in high levels of investment from both the public and private sectors into the area to the benefit of those living and working there.”