Nelson childcare opportunity

The family-owned childcare operation at 441 Nayland Rd, in Stoke. Photo / Supplied

A solid investment property in the burgeoning childcare sector is for sale in Nelson, offering a long-term lease to an established family-owned operator.

Colliers International is marketing the 1,816sq m property — at 441 Nayland Rd, in the suburb of Stoke — with an asking price of $2,150,000.

Geoff Faulkner, managing broker at the agency's Nelson office, sees an opportunity to acquire a long-term passive investment in a sought-after sector.

"Early childhood education is a sustainable growth industry, and purpose-built properties like this have become a highly coveted investment platform throughout New Zealand," says Faulkner.

"The Nelson region offers excellent investment fundamentals, underlined by strong economic growth and abundant lifestyle opportunities, making the area attractive to young families. The property for sale is ideally located on a high-profile corner site in one of Nelson's most sought-after residential and commercial areas, servicing the wider Stoke and Richmond area.

The recently-built facility is suitable for up to 100 children, providing scope for growth beyond the 60 children it is licensed for.

"The centre is run by ACE Nelson, a locally-owned family business, with an excellent reputation, that operates centres in both Titoki and Stoke.

The recently-built facility is licensed for 60 children, but may one day serve 100. Photo / Supplied

"The property owner is moving on to several new projects, creating an opportunity to secure this investment at an attractive yield of 5.8 per cent, which is becoming hard to find in New Zealand's commercial property industry.

"This property offers the benefits of offer a long-term lease, a strong tenant covenant and a growth location."

The property comprises a 414sq m childcare centre of modern design and build, with abundant on-site parking for child drop-off and collection.

It is located in a popular commercial precinct within the Stoke community — one of Nelson's sought-after locations.

The property earns $125,000 in net annual rent plus full outgoings, with 10 years remaining on the current lease, followed by rights of renewal.

Faulkner says the prospect of expanding to a 100-child licence, under current Ministry of Education guidelines, offers scope for further rent growth.

"Ahorangi Childcare and Education Ltd, operating as ACE Nelson, is a well-regarded local operator with ministry reports that read very well."