A prime commercial property in Tauranga, leased to a well-established national childcare operator, is expected to capture the interest of investors seeking a secure, long-term investment with growth potential.

The facility on a 2,455sqm freehold site at 512 Cambridge Road is set to undergo a complete refurbishment before the commencement of an 18-year lease to New Shoots Children’s Centre, which operates 17 high-end childcare facilities throughout the North Island.

Bayleys Tauranga salesperson Rory Brown says the property represents a low-maintenance, passive investment opportunity with a substantial annual return of $336,804 per annum plus GST and outgoings.

“The new lease provides long-term security, with two further six-year rights of renewal, offering an attractive investment horizon of up to 30 years.

“Ideally positioned along a high-profile arterial route, providing easy access to growing residential communities at both Tauriko and Bethlehem, as well as the thriving amenities within the Tauriko Crossing Shopping Centre, the property is primed to benefit from significant local investment, including a development at Tauriko West that will add up to 4,000 new homes over the next decade.”

Brown is marketing the property for sale by deadline, closing at 4:00 pm on Thursday, 31st October 2024 (unless sold prior), with Bayleys colleagues Christy Arundel and Lloyd Davidson.

Existing improvements totalling 427sqm (more or less) include a U-shaped building framed around an outdoor courtyard with canopies, established green space and a sizeable road-front car parking area. The internal floorspace would increase to 535sqm (more or less) upon completion of the planned refurbishment.

Bayleys Tauranga salesperson Christy Arundel says the planned refurbishment will transform the facility into a modern and sustainable childcare centre tailored to meet the needs of the community, licensed for 103 children.

“The property’s lease to New Shoots – a reputable operator with more than 15 years’ experience in the childcare sector – further strengthens its investment appeal. The tenant is known for its high-quality learning environments, and their long-standing reputation, combined with the future-proofed design of the refurbished facility, positions the asset for rental growth over time.

“A combination of scheduled market and CPI rent reviews ensure that the property’s income will continue to reflect market conditions, supporting an opportunity for capital appreciation in a sector that has shown resilience in the face of wider economic challenges.”

Set within an established and growing area of Tauranga, the property is positioned along a main thoroughfare that provides convenient access to the city centre.

Bayleys Tauranga salesperson Lloyd Davidson says the property is adjacent to State Highway 29A – a direct route from Cambridge Road to several key destinations, including Central Tauranga, Mount Maunganui and Hamilton.

“This property occupies a prime position along a crucial connector route, providing straightforward access between Tauranga and its surrounding regions. As the ‘Golden Triangle’s’ economic influence expands, this strategic location's importance and value will only increase.

“Furthermore, as the broader commercial property market recovers from a period of uncertainty, assets with secure long-term leases to premium tenants are increasingly sought-after as a ‘safe hedge’ against volatility. This property offers an opportunity to acquire a rewarding, bottom-drawer investment with minimal maintenance requirements, backed by the strength of a national operator and situated in a thriving mixed-use catchment.

“We expect a high degree of interest from investors seeking a chance to secure a premium childcare investment in a high-growth location, with the certainty of a long lease and potential for future capital growth.”

Click here for more information on the listing.