A portfolio of commercial properties housing one of the biggest pre-school and early childhood learning operations in Hawke’s Bay has been placed on the market for sale.
The four freehold properties are all located in close proximity to each other in Hastings, and are run under the banner of Rascals Childcare – whose parent company is the New Zealand stock exchange-listed Evolve Education brand.
Evolve made its debut on the New Zealand stock exchange in 2014 after successfully raising $132 million through an initial public offering of shares – used to acquire the Lollipops and PORSE businesses. By the end of last year, Evolve Education had gone on to purchase the complimentary childcare businesses Au Pair Link, and ECER Management.
The quartet of Hastings premises house:
A 100 square metre building on 654 square metres of land at 603 Jervois Street. Currently leased until 2020 with four further five-year rights of renewal
A 185 square metre building on 631 square metres of land at 602 Jervois Street. Currently leased until 2020 with four further five-year rights of renewal
A 90 square metre building on 613 square metres of land at 903 Willowpark Road. Currently leased until 2020 with four further five-year rights of renewal
A 90 square metres building on 613 square metres of land at 905 Willowpark Road. Currently leased until 2020 with four further five-year rights of renewal.
Combined, the four properties generate an annual rental revenue of $180,000.
The three properties at 602 Jervois Street, 903 Willowpark Road and 905 Willowpark Road are pivotally located around a corner intersection and back onto each other – enabling a shared playground area to be utilised by the toddler clientele.
Meanwhile the property at 603 Jervois Street is immediately across the road from the other play facilities. Multiple car parking space is part of each of the four properties – allowing parents and caregivers to safely drop off and pick up their children.
The pre-school play facility portfolio of properties is being marketed for by Bayleys Hawke’s Bay salesperson Daniel Moffitt through a tender process closing on September 15.
Mr Moffitt said the four property portfolio was the most unique offering he had listed in recent years – based on what were once residential properties in a strategic configuration now remodeled into a commercial offering with a strong tenant. Records show the properties were first built as homes in the 1920s.
“Normally a property portfolio consists of bigger commercial or industrial premises – such as supermarket premises, warehousing, a strata title light industrial block, or a conglomeration of adjoining commercial office premises. Consequentially, the buyers in that multi-million-dollar category tend to come from the corporate sector or large investment funds,” he said.
“However, the configuration of this Rascals portfolio makes it attractive to smaller private investors or those looking at trust-fund investment opportunities. The reputation of the NZX-listed tenant, the cluster nature of the businesses operating from the locations, and the ongoing clientele for those businesses, makes this one of the more interesting listings we have taken on in recent years.
“Extensive remodeling of the original dwellings – including the installation of council compliant bathroom facilities specifically catering for young children, along with opening up internal bedroom and lounge walls to create large open plan play areas - have seen these properties efficiently reconfigured into a new lease of life in a niche commercial sector.”
Mr Moffitt said parent company Evolve Education Group was a leading provider of early childhood education (ECE) throughout New Zealand – operating under various brands such as Lollipops Educare, PORSE, Au Pair Link, and Rascals.
Rascal’s parent company Evolve Group has strict criteria in acquiring new operators under its brand. Centres must be operating in purpose-built premise, must be licensed for up to 50 places with a 75 percent occupancy rate, must have a minimum 10-year lease in place on the land and buildings and must be making at least $150,000 profit per annum.
“The unified value of this portfolio partly lies in the ability of the individual titles to not only share the central outdoor play area from three separate entry points, but also the substantial number of car parking spaces delivering a high degree of patron satisfaction,” he said.