Long-term early childhood investment in undersupplied Pakuranga

An architecturally designed, state-of-the-art Auckland early childhood centre and cafe with quality long-term tenants is on the market through Colliers International.

The 8,675sq m property at 149 Cascades Road, Pakuranga, is being marketed by for sale by deadline private treaty by Jimmy O’Brien and Peter Kermode. Offers on the property close on Wednesday, 31 May, unless sold prior.

O’Brien says it is an opportunity for investors to buy a premium early childhood and cafe offering annual returns of $415,860 in rent.

“Pakuranga is undersupplied when it comes to quality early childhood education, which makes this state-of-the-art centre an astute long-term investment,” he says.

“At the heart of this opportunity is New Shoots, a boutique early childhood centre operator with a strong trading history.

“The adjoining Source Cafe provides a second income stream, making this a split-risk investment.”

New Shoots is on a new 15 year lease returning $340,860 per annum, while Source Cafe is on a five year lease returning $75,000 per annum.

Since opening, both have been trading above expectations.

Located on a high-profile riverside site, O’Brien says the property adjoins Lloyd Elsmore Park and offers tranquil views over a neighbouring golf course.

Designed by Phil Smith, a UK architect who specialises in world-class education design, the centre features high quality, durable materials to reduce long term maintenance and increase longevity.

Kermode, who is Colliers International’s early childhood centre property specialist, says New Shoots is licenced for 115 children.

The centre offers generous indoor and outdoor areas that exceed Ministry of Education requirements and provide an inviting home-like feel, he says.

New Shoots was established in 2010 by two early childhood professionals with more than 50 years of collective experience in the sector.

“It has since grown into a boutique brand of six early childhood centres, with two more due to open this year,” Kermode says.

“Already a well-known name in the market, New Shoots attracts high-quality teachers and support staff who share the same passion and vision for educating and caring for children.”

Kermode says all New Shoots buildings are designed in close consultation with architects, landscape architects, interior designers and early childhood professionals.

“The Cascades Road centre represents a new benchmark for functionality and sustainability in the early childhood sector,” Kermode says.

“The building is sustainably fitted out with ample natural light and ventilation, rooftop solar power units, on-site wastewater treatment and finishes with low volatile organic compounds throughout.”

The building has been entered in the upcoming Property Council Awards under both the Education and Green award categories.

Kermode says the early childhood sector is characterised by stability and longevity, with a low rate of building obsolescence.

“Early childhood centres often occupy buildings throughout their full economic life, and there is often considerable business goodwill attached to the premises and related licenses.

“The benefit to landlords is that when tenants move out, it is highly likely another will come forward and inherit the existing goodwill of the previous operator.”

Kermode says very few freehold early childhood centre investments come to the market, particularly the secondary market, because they are highly suited to long-term ownership.

O’Brien says Source Cafe will be a place for parents and locals to socialise, relax and catch up with one another.

“The first branch of Source, established in Pakuranga last year, has been very well received,” he says.

“It quickly became a favourite among locals and has attracted customers from further afield following an early review from The Denizen naming it as a dream brunch and lunch location.”

Alongside the Cascades Road premises, a second location is scheduled to open in Westgate, Auckland.

O’Brien says the early childhood centre is conveniently located at the interface between residential and commercial areas, and enjoys the combination of high profile and easy access.

High-decile schools in the area include Pakuranga College, St Marks School and St Kentigern College.

The Cascades Road property has direct pedestrian access to Lloyd Elsmore Park via a walkway alongside the river.

The tenure freehold (cross lease) site is zoned business under the operative Manukau District Plan.

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