Grey Lynn childcare site has development potential

5:00 AM Saturday November 14, 2015 Colin Taylor

An elevated view of a childcare centre occupying a big Grey Lynn site at 116-120 Surrey Crescent.

A well-established childcare centre on a large Grey Lynn site with long term development potential under its Proposed Auckland Unitary Plan (PAUP) Mixed Use zoning will go under the hammer early next month as part of Bayleys’ latest Total Property portfolio auction.

The property comprises three separate former residential dwellings totalling 575 sq m which have been converted for use as a childcare centre along with a residential flat. 

Located on a 1515 sq m site at 116-120 Surrey Crescent, the property is producing net annual rental income of $190,383 from a 10-year lease to NZX listed Evolve Education Group - one of New Zealand’s largest early childcare centre (ECC) operators.

The property which is among 46 Total Property offerings that will be auctioned on December 2, unless sold earlier by negotiation, is being marketed by Mark Pittaway and James Chan of Bayleys Auckland.

“This property represents an outstanding investment opportunity given the long term lease in place to a leading provider in the growing early childhood education sector,” says Pittaway. “It also encompasses a high profile, substantial level site in a sought after location with considerable development options longer term given the flexible zoning which will come into play under the new unitary plan.”

The property in two cross lease titles has a wide road frontage onto Surrey Crescent. The main two-level building was originally an early 1900s bungalow and now also encompasses a residential flat on the upper floor which has separate access. Two single level buildings to the right of the main building were built in the 1960s and 1970s. There is also a storage shed at the rear of the property behind the main building.

The childcare centre, which trades as the Grey Lynn Nursery and Preschool, is licensed for 68 children. The main building caters for children aged three and over. The nursery for children under two is in another building, while two to three year olds are located in the third building. “The spacious outside area consists of a number of playgrounds, some of which are currently being upgraded with further improvements planned for next year by the tenant at their cost,” says Pittaway.

Grey Lynn Nursery and Preschool is part of the Evolve Education Group, which is listed on both the New Zealand and Australian stock exchanges.  The company’s main business is acquiring and operating ECE facilities. It recently purchased its 100th childcare centre in New Zealand - one of 13 centres acquired in its current financial year.

It also offers two home based services:  Porse, with around 5000 enrolled children and over 1800 home based educators; and Au Pair Link which facilitates the placement of over 400 au pairs each year who look after 500 to 600 enrolled children. The third segment of Evolve’s ECE business is providing accredited training courses.

Evolve’s current 10-year lease runs until July 2022, with two three-year rights of renewal and  two-yearly rent reviews to the Consumer Price Index and to market on renewal. 

Chan says Surrey Crescent is a key traffic thoroughfare linking Richmond Rd with Great North Rd and then on to Ponsonby, the Auckland CBD and to motorway links. The surrounding area has a mix of residential, retail and commercial properties.

The property is currently zoned Residential 6A but this will change under the PAUP to Mixed Use zoning which has a basic height limit of 16.5 metres.

“Grey Lynn and adjoining Ponsonby have become very desirable central city residential locations and have experienced significant growth in residential property values,” says Chan. “Both suburbs have also undergone more intensive multi-unit residential and town house development in recent years. The future Mixed Use zoning on the Surrey Crescent site provides the option of doing something similar once the current lease has expired or another type of development possibly encompassing some commercial uses.” 

Mark, James.jpg

Mark Pittaway (left) and James Chan (right), of Bayleys Auckland.

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