Former 1920s residential properties have been remodelled into the commercial childcare operation.
A portfolio of commercial properties, one housing one of the biggest pre-school and early childhood learning operations in Hawke's Bay, is now on the market for sale.
It is being marketed by Bayleys Hawke's Bay salesperson Daniel Moffitt - through a tender process closing on September 15 - and it features in Bayleys' latest Total Property magazine.
The four freehold properties are close to one other in Hastings, each one run under banner of Rascals Childcare, whose parent company is the NZ Stock Exchange-listed Evolve Education brand.
Evolve made its debut on the stock exchange in 2014, successfully raising $132m through an initial public offering of shares, which were used to acquire the Lollipops and PORSE businesses.
By the end of last year Evolve Education had purchased complementary childcare businesses Au Pair Link, and ECER Management.
The quartet of Hastings premises generating total annual rental revenue of $180,000 are:
1. A 100sq m building on 654sq m of land, at 603 Jervois St, leased till 2020 with four further five-year rights of renewal.
2. An 185sq m building on 631sq m of land, at 602 Jervois St, leased till 2020 with four further five-year rights of renewal.
3. A 90sq m building on 613sq m of land, at 903 Willowpark Rd, leased until 2020 with four further five-year rights of renewal.
4. A 90sq m building on 613sq m of land at, 905 Willowpark Rd, leased until 2020 with four further five-year rights of renewal.
Three of the properties - 602 Jervois St, 903 Willowpark Rd and 905 Willowpark Rd - pivot round a corner intersection and back onto one other, which enables a shared playground to be used by the toddler clientele.
The fourth property, at 603 Jervois St, is immediately across the road from the other three.
Multiple car parking space is a feature of each property, allowing parents and caregivers to safely drop off and pick up their children.
Moffitt said the four-property portfolio offering is unique. It comprises former residential properties in a strategic configuration, now remodelled into a commercial offering with a strong tenant.
Records show that the properties were first built as homes in the 1920s.
"Normally a property portfolio consists of bigger commercial or industrial premises - such as supermarket premises, warehousing, a strata title light industrial block, or a conglomeration of adjoining commercial office premises. Consequentially, the buyers in that multi-million-dollar category tend to come from the corporate sector or large investment funds," he said.
"However, this configuration makes the Rascals Childcare properties attractive to smaller private investors, or those looking at trust-fund investment opportunities. The reputation of the NZX-listed tenant, the cluster-nature of the businesses operating from the locations, and the ongoing clientele for those businesses, makes this one of the more interesting listings we've taken on in recent years.
"Extensive remodelling of the original dwellings - including the installation of council-compliant bathroom facilities specifically catering for young children, along with opening up internal bedroom and lounge walls to create large open plan play areas - has given these properties with a new lease of life in a niche commercial sector."
Moffitt said parent company Evolve Education Group was a leading provider of early childhood education (ECE) throughout New Zealand, operating under various brands such as Lollipops Educare, PORSE, Au Pair Link, and Rascals.
Rascal's parent company Evolve Group has strict criteria in acquiring new operators under its brand.
Centres must operate in a purpose-built premise; be licensed for up to 50 places, with a 75 per cent occupancy rate; have a minimum 10-year lease in place on land and buildings and make at least $150,000 profit pa.
Moffitt said combined positioning made the four properties worth far more as a portfolio than if marketed for sale individually.
"Not only do three of them share a central outdoor play area, there's also substantial car parking which delivers high patron satisfaction."