Investment play for strategic Morningside site

A modern, purpose-built childcare centre with a new 15-year lease is for sale in the popular Auckland inner-west suburb of Morningside.

The single-level 385sqm building with extensive carparking to the front entrance sits on 1,500sqm of freehold land zoned Residential - Mixed Housing Suburban at 70 Malvern Road, opposite Fowlds Park in a sought-after family-focused neighbourhood.

The centre is licensed for 80 children, and the architecturally designed building constructed in 2010 offers functional and well-presented early learning and care rooms, administrative areas, a good standard of amenities, along with a landscaped, interactive outdoor space.

The site runs through to St Lukes Road, with the rear of the property offering considerable branding profile to this main arterial.

The property returns an annual net income of $291,200 plus GST, with a new 15-year lease to an established, proven operator that has a total of 16 centres throughout New Zealand. The new lease provides fixed rental growth throughout the lease term, and includes an additional three, five-year rights of renewal.

The property offers investors a strong passive opportunity in a sought-after suburban growth location, according to Damien Bullick and Alan Haydock of the Bayleys Auckland Metro team, who are marketing the offering by tender closing Wednesday 26th November, if not sold prior.

Other childcare investment assets on the market in recent years have been eagerly snapped up by astute investors, says Bullick.

“This reflects the defensive qualities that such assets offer, given demographic demand for childcare and early education services, government funding initiatives for families, and the long lease structures that tend to come with such properties to ensure business continuity.

“Additionally, the Government recently changed the income threshold eligibility for its Family Boost rebate, meaning more families will be able to claim back on fees paid for early childhood education, which further supports these operations.

“Location is also key, and with Morningside bordering Kingsland, St Lukes and Mount Albert, there’s a broad catchment of children requiring daytime out-of-home care for this centre to tap into.”

The Residential - Mixed Housing Suburban zoning of the property also underscores the intrinsic value of the offering, with Haydock saying Morningside is seeing significant residential development thanks to its connectivity advantages and the level of amenity the city-fringe suburb enjoys.

“It’s an identified and strategic growth location which leverages excellent access to motorway links and public transport networks. The subject site is just 1km from Kingsland Village, is handy to Westfield St Lukes, and is around 6km from Auckland CBD so it scores highly on convenience.

“These fundamentals underpin the large new build-to-rent development by Simplicity Living, which will deliver more than 260 homes for long-term rent on a site nearby, around 150 metres from the Morningside train station.

“Morningside is experiencing widespread urban regeneration, with a blend of traditional villas, modern townhouses, and medium-density developments attracting a new generation of young families and professionals.

“This demographic shift will continue to drive increased demand for quality early childhood education in the immediate area.”