Boutique Mt Eden childcare centre
The Mt Eden childcare centre is in an affluent central Auckland suburb. Photo / Supplied
A refurbished character bungalow leased to a boutique Mt Eden childcare centre offers long-term stability and growth to investors.
Colliers International brokers Peter Kermode and Shoneet Chand will sell 158 Balmoral Rd at auction on March 14 — unless sold earlier.
A short walk from plentiful recreation and retail amenities, the 607sq m freehold property is in an affluent central Auckland suburb.
Kermode says it is on long-term lease to Appleseed, a boutique family owned and operated early childhood education centre.
“This successful family business has a strong trading history, which offers stability, longevity and growth — all attributes that are sought after by astute investors.”
Appleseed’s 10-year lease has eight years remaining, followed by two five-year rights of renewal.
The current rent is $71,604 net per annum with fixed rental growth of 2 per cent pa (or set to the consumer price index, whichever is greater).
Kermode says childcare centres in converted houses are particularly attractive as stable investments.
“They can easily be converted back to residential use, which takes a degree of risk out of the equation.”
Appleseed is in a particularly strong trading position, thanks to the significant barriers to entry faced by competitors in the Mt Eden area.
“Properties with conversion potential are expensive and hard to find,” Kermode points out.
“You need the right combination of on-site car parking, a well-positioned building and adequate space for an outdoor play area.
“Even if the right property was found, there would be significant costs in gaining resource consent and carrying out conversion work to current building standards.”
In recent years, Kermode says there has been a shift towards larger, purpose-built childcare centres, driven in part by the cost of construction. “However, there remains strong demand from parents for smaller, boutique centres that have a more homely feel.”
Appleseed is deigned and licensed to care for 27 children. It offers a mixed age, multicultural setting where children learn not only from the teachers and materials, but from each other.
The boutique scale of the business means staff are able to develop strong bonds with each family and provide a high level of personal service.
The latest Education Review Office report noted Appleseed was well placed to promote positive learning outcomes for children.
Chand says the building is essentially a character bungalow that has been converted and extended to suit is current usage.
Services such as fire detection have been upgraded to meet modern building standards
“The property has a current warrant of fitness and is in very good condition inside and out,” he says.
“It features a generous outdoor play area, including an extensive covered area that can be fully enclosed and has its own heating.
“Inside, the climate can be regulated by efficient, cost-effective heat pumps.”
The building is clad primarily with weatherboard and has long run iron roofing. External joinery is a mix of timber framing, including some feature lead lights, and double glazed aluminium.
Chand says the property is about 5km from the CBD, and its position on a major arterial road offers prominent signage and profile opportunities.