Dominion Rd childcare investment

The childcare facility at 1438 Dominion Rd - indicated by orange boundary. Photo / Supplied

Wilson Hurst is selling the land and buildings occupied by a childcare business in Dominion Rd.

The freehold property, 1438 Dominion Rd, is being sold by an expressions of interest campaign closing on August 9.

Wilson Hurst agent Everett Jaura says it was purpose-built and has operated since 2009. "Established childcare operations such as this one have become the darling of the property investment marketplace.

"It's due to the Government's long-term commitment to fund early childhood education; population growth in major cities cities increasing demand; a scarcity of properties suitable for childcare and stringent regulation from local authorities plus Ministries of Health and Education.

"So early childcare ends up being a financially viable business model - supported by high demand and funding - yet a shortage of properties to operate from. For this reason, properties with childcare tenants attract a lot of investor interest."

However, Jaura still sees childcare tenanted investments remaining relatively affordable for investors. "Investments with similarly low levels of low risk, maintenance and tenant stability tend to be pricier, so they've remained attractive to smaller, individual investors and family trusts."

The location benefits from being a hotbed of nearby infill residential development.

The 1069sq m land parcel is zoned Mixed Housing Urban (Unitary plan) allowing intensive housing development of up to three storeys he says.

The owner occupier has signed on to a new 10-year-lease with two eight-yearly rights of renewal.

The tenant pays $140,000 per annum net, is licensed to cater for 50 children and has quality facilities. "Annual rental growth of 1.5 per cent is locked-in, adding certainty to cash flow projections and personal guarantees add an additional layer of protection," says Jaura.

"The current owner-occupier has been in the business for over a decade with a portfolio of six centres."