Societal changes, population growth and government subsidies are some of the compelling factors underpinning the private
early childhood education and childcare sector in New Zealand and in turn, this is fuelling investment interest in
properties tenanted by providers of these services.
Globally, childcare/education facilities are an emerging investment asset class and it’s one that is gaining traction in
this country on the back of changing work and family dynamics, and sound returns.
A fully-leased purpose-built early childcare facility on the corner of Great South Road and Butterworth Avenue in
Papakura was recently placed on the market for sale and is attracting strong early enquiry.
Marketed by Tony Chaudhary, Amy Weng and Janak Darji of Bayleys Manukau, the land and buildings at 336 Great South Road,
Papakura will be sold by deadline private treaty closing 12pm, Thursday 1st July, unless sold prior.
The freehold corner 1,419sqm site supports a modern, multi-level and low-maintenance building with 511sqm floor area,
along with 425sqm landscaped and functional outside space with an enclosed deck, secure perimeter fencing and sealed car
parking for 17 vehicles on the eastern boundary.
The residential-style building has three separate play areas, sleeping rooms, children’s bathrooms and kitchen on the
ground floor, with staff amenities and storage on the upper level.
The property was purpose-built for the national tenant Kids World Childcare Papakura Limited, trading as All About
Children Childcare, and the facility is licensed for 85 children.
It returns $243,100 per annum plus GST and outgoings and the lease is structured for assured rental growth. The 15-year
lease commenced in 2018 and has rights of renewal until 2053. The rent is reviewed annually to the Consumer Price Index.
Chaudhary said the property is located within an evolving residential catchment that is seeing greater intensification
as Auckland’s population continues to grow.
“Papakura and its surrounds offers one of the largest population catchments in the Auckland region and, given the push
for higher residential density, the need for accessible childcare services will be heightened,” he said.
“There is still a pipeline of developable greenfield land for housing and as Auckland’s traditional boundaries spread
out, the Papakura area is in demand.
“The underlying land value of the subject property, which is zoned Residential Mixed Housing Suburban, can only escalate
over time.”
Chaudhary said along with changing workforce trends which are driving the sector at a wider level, the tenant’s long
lease and its proven operational model, makes this a desirable passive investment for a long-term hold.
“Out-of-home childcare is increasingly required these days with both parents often working and families becoming more
fragmented geographically.
“The demand for a facility such as this will continue on the back of the rise of the double-income household” he said.
“Additionally, the childcare sector tends to be defined by longer leases and in this instance, most of the outgoings are
the tenant’s responsibility which further enhances the appeal for a passive investor.”
All About Children Childcare operates in eight locations around New Zealand, with a presence in Auckland, Manawatu, and
Wellington and has been in business for more than 10 years.