Hawke’s Bay investment is child’s play

The Property
• Architect-designed purpose-built childcare centre with 376sqm floor area and generous outdoor space
• Sited on 1,098sqm freehold land, held in two titles
• Occupied by established childcare business with a 10-year lease from 2019 and rights of renewal until May 2034
• Returning $118,247 per annum + GST and 100% outgoings

Quick Look
• National Total Property marketing campaign – for sale by auction
• Interest generated via Bayleys’ databases and Total Property magazine
• 26 enquiries during the 5-week marketing campaign and strong bidding on auction day
• SOLD under the hammer for $2,165,000 at a 5.46 percent yield
• Purchased by a local investor

The Story

The land and buildings of a Hastings property occupied by a popular childcare centre business, proved to be a hit with the market when auctioned.

Rodger Howie, Bayleys Napier, marketed the property and said it’s a quintessential bottom drawer investment.

“Investors are actively seeking out investment opportunities for pivotally-located properties with strong underlying land values and well-established occupiers on long-term leases.

“These are the properties that form the backbone of a good-returning investment portfolio and Hawke’s Bay buyers certainly identified the strengths of this offering.”

Lumsden Kindergarten and Childcare Centre, which is licensed for up to 68 children, occupies the property which has a homely feel and spans two integrated buildings – a combination of architecturally-modified and purpose-built childcare buildings with decks and open plan spaces.

The design was done by the late-Steve McGavock, a protégé of renowned Hawke’s Bay architect, John Scott.

“This was a superb opportunity to secure an established childcare centre in the central Hastings suburb of Akina, where there is a high concentration of young families,” said Rodger.

“Strong demand for childcare services in the region means the facility is at near-full capacity and the vendor had maintained the property to the highest of standards.

“The childcare sector is now a sought-after asset class, so I was delighted to bring this property to the market.”

Purchaser Comment

The purchaser is a Hawke’s Bay resident and business owner who said it was important to him to buy an investment property local to where he lives.

There’s something about having a bricks and mortar investment asset that you can drive past and tangibly view.

The purchaser who lives in Hastings and operates a business there, said he was looking for a well-returning and well-tenanted local property as an investment proposition.

“I love Hastings and it made sense to have a commercial investment property in the same city as I live and work,” he said.

With good interest in the property leading up to the auction and spirited bidding on the day, the buyer was intent on securing the childcare premises as a strong passive investment to start his commercial property portfolio.

“As a buyer, the auction process with Bayleys was nice and smooth and I’m confident that I have made a good purchase as Hastings is a popular city with great fundamentals and childcare assets are in high demand.”

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