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Property investors swing into action as pre-school centres placed on the market for sale

The suburban land and buildings housing a pair of modern purpose-built childhood care centre business in suburban Auckland have been placed on the market for sale.

With long leases in place at all both properties – one on Auckland’s North Shore and the other in South Auckland – the separately owned premises are being targeted for sale to passive property investors.

The bigger of the two entities is located at 58 Ormiston Road in the South Auckland suburb of Flat Bush, and contains a 1,212 square metre early childcare centre, and a separate 476 square metres of first-floor commercial office premises tenanted by the childcare centre’s head office.

Occupied by ChoiceKids the land and buildings are being marketed for sale by tender through Bayleys Manukau, with tenders closing on March 13. Salespeople Tony Chaudhary, Amy Weng and Janak Darji said the Ormiston Road property housed one of eight ChoiceKids sites in South Auckland.

Choicekids Ormiston Road Ltd is on a current lease running through to 2035, with two further 10-year rights of renewal, generating annual net rental of $374,400 plus GST and outgoings. Meanwhile parent company Choicekids Childcare Ltd tenants the commercial office space on a lease running through to 2029 with two further 10-year rights of renewal generating annual net rental of $100,000 plus GST and outgoings.

Mr Chaudhary said the Ormiston Road site was one of New Zealand’s biggest childcare centres – encompassing multiple play zones and covered activity areas, as well as a huge sealed car parking area for 41 vehicles – comparable in size to a suburban shopping centre hub.

The childcare business buildings and infrastructure sit on some 5,209 square metres of freehold land, close to a vacant 825 square metre section of land included in the offering for sale.

“The main childcare building and office is built on concrete foundations and is constructed of fibre cement external cladding, aluminium exterior joinery and iron roofing. The open-plan internal layout features multiple activity rooms, toilets and changing rooms, sleeping rooms, staff amenities, laundry and resource room, while the upper floor contains seven individual offices, boardroom, storage room, bathrooms and a kitchen,” Mr Chaudhary said.

A staircase and internal lift connect the two levels. The childcare facility is licensed to accommodate up to 150 children at a time. Neighbouring properties in the general business zoned locale feature a plethora of semi-commercial and light industrial buildings and companies.

Meanwhile on the other side of Greater Auckland, the Hand and Hand childcare business housed at 21 Park Hill Road in Birkenhead is being marketed for sale at auction on March 11. Bayleys salespeople Jarrod Qin, Nicolas Ching and Michael Nees said the Hand and Hand premises was purpose-built in 2017 – including a dual entrance driveway leading into a sealed parking area, and perimeter safety fencing around the property’s boundary.

The Park Hill Rad Hand and Hand business and has sister branches in the Auckland suburbs of Beachlands, Flat Bush and Hobsonville.

Hand and Hand is on a new 15-year lease at the Birkenhead location running through to 2035 with a further six-year right of renewal. The tenancy generates annual net rental of $95,550 plus GST. The single-storey 178 square metre building sitting on some 716 square metres of freehold land has been certified as 100 percent compliant with New Building Standards (NBS), and is licensed to accommodate up to 35 children.

Mr Qin said the Park Hill Road site was strategically located en-route between the predominantly residential suburb of Birkdale which was currently undergoing substantial in-fill housing social housing development growth, and the employment hubs of the Northcote, Takapuna and Wairau Park.

“That makes Hand and Hand Birkenhead handy to drop the pre-school aged children off at day care on the way to work, and subsequently pick them up again at night,” Mr Qin said. The property is surrounded by residential dwellings.

Bayleys’ national commercial and industrial director, Ryan Johnson, said population growth, combined with more families with two-parents working full-time, had been the key drivers of growing demand for childcare places over the past decade.

“That is one of the reasons childcare venues have proliferated in suburban locations – along with the cheaper per square metre rates for land and building when compared with establishing a similar sized entity in say the central city or city-fringe locales,” Mr Johnson said.

Since 2008, the proportion of pre-school children enrolled in early childhood education (ECE) and the amount of time they spend there have both risen. The number of children has risen from 93.6 percent to 96.6 percent, with time spent in ECE has reached an average of 21.7 hours a week, up from 13.5 hours in 2000. The Government fully funds 20 hours of care a week for all children aged three, four and five.

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