Planned passive property in Howick
An artist’s impression of the new childcare, cafe and apartment development in Howick. Photo / Supplied
A new childcare, cafe and apartment development, to be built in the Auckland seaside suburb of Howick, is for sale off the plans as a solid, long-term, passive investment property.
“It will comprise two standalone buildings,” says Shoneet Chand of Colliers International who, with colleague Kris Ongley, is marketing the planned complex at 110 Ridge Rd and 12 Nelson St for sale by deadline private treaty closing at 4pm on Wednesday December 6 – unless it sells earlier by negotiation.
Featured in the latest Colliers Portfolio publication, one building has been designed for a purpose-built childcare facility; and the other will contain a ground-floor cafe with four apartments above.
The buildings will be constructed on a 1741sq m, two-title, freehold site.
Chand says the development has very strong fundamentals and will appeal to investors seeking quality, mixed use and passive investments for their portfolios.
“It’s a superb long-term investment property with a new 10-year lease to an established early childhood education operator; in an excellent location in Howick, and with the split-risk appeal of multiple income streams,” he says.
“The childcare centre is licensed for 110 children and will be leased to proven operator Bright Beginnings, which will also lease the cafe.
“The four 3-bedroom apartments, each 91sq m with 8sq m balconies, will provide the new owner with a residential income to diversify the rental stream.”
Chand says the centre is being developed and occupied by quality operators with extensive experience in the childcare and building industries.
“With new build construction to 100 per cent of current codes, the property will make for an excellent low-maintenance investment.”
The childcare centre and cafe are signed to one lease, earning $356,020 net plus GST per annum. The tenant will be Nikiraj Educare Limited, trading as Bright Beginnings Early Learning Centre.
“Nikiraj Educare is a very well-regarded operator in the industry. Its other centres at Glendowie, Panmure and Mt Roskill are testament to the level of quality and success that directors Rajender and Nikita Kohli strive for.
“The lease includes two rights of renewal of six years each, extending the total term to 22 years,” Chand says.
The site at 110 Ridge Rd and 12 Nelson St, Howick, is indicated by a blue border. Photo / Supplied
“Fixed rental increases every two years are indexed to the Consumer Price Index, to a minimum of 2.5 per cent, while market rental reviews are due to take place upon renewal.
“Lease guarantees provide for long-term cash flow and security of income.”
Ongley says the apartments, which are available with vacant possession, could provide an additional income of about $150,000 per annum.
“The site was specifically identified by the vendor as ideal for a multi-use childcare development due to its setting among family neighbourhoods, closeness to local schooling, and permissive zoning.”
Ridge Rd is a main urban link road connecting Howick Village and Highland Park shopping areas, leading into Pakuranga Rd as it heads west.
“The immediate surrounds are typically established residential neighbourhoods and associated services and amenities,” Ongley says.
“Howick is home to several primary, intermediate and secondary schools, including Howick Primary, Howick Intermediate and Owairoa Primary, which are all within walking distance of 110 Ridge Road.”
The two-level, purpose-built childcare centre will feature a 583sq m outdoor play area, functional layout and high-quality fit-out.
“Along with two childcare areas for different age groups, the centre of about 915sq m will include a sleep area, bottle warming station, kitchen, staff room, management office, storage and amenities,” Ongley says.
“The 106sq m ground level cafe will have outdoor seating area for alfresco dining, kitchen and servery, staff storage area and amenities.
“A covered entry will lead to the apartment foyer running alongside the cafe, next to a driveway leading to off-street parking.
“A total of 24 parking spaces will be available, including two disabled parks, eight childcare staff parks, seven childcare drop-off spaces, three cafe spaces, and one car park for each of the four apartments.”
Ongley says the development is being undertaken by established business partners JP Singh and Kuljeet Singh, who have 40 years of combined experience in the building industry and who have set up more than 30 childcare centres around Christchurch and Auckland.
“All the centres have been purpose-built and show high occupancy levels, with many operators looking to establish more sites,” he says.
Shoneet Chand and Kris Ongley of Colliers International