Blockhouse Bay childcare for sale

The purpose-built childcare facility at 21 Boundary Rd, indicated by a red border, could also be converted for residential use. Photo / Supplied

By True Commercial

The building and land housing a recently commissioned Blockhouse Bay childcare business is on the market for sale.

JLL agent Kevin Reardon is marketing the facility, located at 21 Boundary Rd.

The offering comprises a purpose-built 313sq m childcare building - now tenanted by a private operator on a 900sq m freehold site.

"With a long-term lease in place, this property will provide a stable, passive, net rental income of $135,200 per annum (pa)," says Reardon.

It will be sold through an expressions of interest campaign, closing September 14, unless sold earlier.

The building is over two levels, with all modern fittings including electronic sliding doors, a kitchen upstairs and another kitchen area on the lower level. There is also a large play area outside, plus nine carparks.

The operator is well established in the business, with other centres located around Auckland, says Reardon.

"The childcare facility's residential location was carefully selected by the developer, who noted a shortage of childcare facilities in the area and sought to meet demand. Land was purchased and an architect put to work to design everything from the ground up.

"However, if required, the design and location, allows for easy conversion back to residential use."

It sits on a Blockhouse Bay residential street, in an area popular with young families. Being near New Windsor, the childcare centre draws business from both areas.

Reardon says childcare centres remain a strong and reliable investment that continues to provide competitive returns. With the cost of living continuing to rise, more and more parents need to return to work to meet living costs, which results in an increase in demand for early childhood education (ECE).

The ECE market is a well-known, established and watched market, in constant demand as the population and influx of people into Auckland and its surrounding suburbs forecast to grow by half a million within the next 10 years.

"Public funding for the sector remains strong, having risen from $860 million in 2008 to $1.63 billion at present. The proportion of children enrolled in early childhood education is now 96.6 per cent as opposed to 93.6 per cent in 2008. This shows that the industry is experiencing a constant trend of steady, reliable growth with a national average of 152 ECE centres opening each year."

Reardon adds that childcare centres provide a great opportunity for smaller investors to get hold of a reasonably priced, long-term, passive investment.

"They are notoriously sought after and tightly held, which results in the centres that are put on the market being snatched up by an investor pool that is just waiting for the opportunity. This leaves few options for other investors wanting to enter the market other than buying brand new builds or developing their own."

Blockhouse Bay and the greater Mount Roskill area has seen some great upgrades and developments including the Waterview Tunnel and shopping centres along Stoddard Road, which bode well for the increase of population and traffic in the suburbs.

Blockhouse Bay and Mount Roskill house many families who work in the city or surrounding commercial hubs. "This creates a strong opportunity for schools and childcare centres to be in the area so children can be dropped off and collected as close to home as possible."