Manukau site may be kid's play for savvy investor

Kidicorp has childcare facilities and its national operations office at Great South Rd. Photo / Supplied

Housing the national operations office and two licensed childcare facilities for Kidicorp, a high-profile and multi-coloured building at 561 Great South Rd, Manukau will be auctioned by Bayleys on August 19.

The building, on a 4046sq m freehold site on the corner of Great South Rd and Puhinui Rd, Manukau City, is tenanted to one of New Zealand's largest providers of early childhood education, and is being marketed by Michael Pleciak, Mike Adams and Mark Pittaway of Bayleys.

"Kidicorp operates early childhood and after-school care centres throughout New Zealand with facilities in most regions from Auckland to Dunedin," Pleciak says.

"They took an 18-year guaranteed lease on this prominent low-maintenance building in September 2006. As part of the lease, they have undertaken to redecorate the premises in 2012 and again in 2018."

The net rental income from the property is $287,663 per annum, plus GST, with the rent reviewed every two years to the CPI formula and every four years to current market rentals with Kidicorp responsible for 100 per cent of the operating expenses.

"In the current market there's a shortage of passive investment properties with sound, long-term leases in place, so we are expecting significant investor interest in this property, especially given that it has a national head office tenancy," says Pleciak.

He says the present owner is a private investor who is wishing to free up some capital to invest in a more hands-on project.

"It is a business opportunity likely to appeal to a private individual investor wishing to have the locked-in security of an established and secure lease for the next 15 years. This allows for easier access to funding, the ability to plan and project returns and minimal risk which, for a private investor, is reassuring."

Zoned Business 5 under the Manukau Council District Plan, the single level buildings were originally built as office and warehouse premises in the early 1980s. Converted by Kidicorp in late 2006 into comprehensive childcare facilities and their national operations base, the floor areas are about 1024sq m for the office and childcare facilities and an outdoor activity area of 369sq m.

"There is also parking on-site for 29 cars and double access from either Great South Rd or Puhinui Rd. This intersection is traffic-light controlled and the property has significant profile to passing traffic, given that they are busy arterial roads," says Pleciak.

"The site is roughly halfway between Papatoetoe and Manukau centres and this provides a wide catchment area for early childcare and after-school care services enhancing the viability of a business such as Kidicorp.

"Manukau is New Zealand's third largest city and the fastest growing with 26 per cent of the population aged under 15 years of age, according to the 2006 Census figures."

With motorway connections just 800m to the south at the Te Irirangi Drive on-ramp and 2.2km north at the East Tamaki on-ramp, the facility is well-located for commuting parents dropping off and collecting children.

Pleciak says Great South Rd, Manukau is a sought-after business area with a mix of land uses including retail, commercial, service providers and the AUT Manukau Campus on the former Carter Holt Harvey site on the corner of Te Irirangi Drive and Great South Rd.