On the city fringe in Hopper Street, Mount Cook, the two-level former industrial building on a 564-square metre site is anchored by a childcare occupier on the ground floor, with three sizeable residential apartments above.
Originally built in the early 1960s as two interconnected and integrated warehouse/workshop properties, a reconfiguration of the space in 2011 saw a fit-for-purpose refurbishment for Kākāpō Kids – a successful and popular childcare provider licensed for 40 children.
This followed the earlier conversion in 2004 of the upstairs space to create three very generous separate apartment tenancies, with a total of 15 bedrooms between them.
During both of these upgrade projects, seismic strengthening was undertaken.
Across the commercial and residential tenancies, the property has a floor area of 730 square metres, two car parks, additional rear service lane access and returns a net income of circa-$280,000 plus GST per annum.
The Central Area-zoned offering at 19-21 Hopper Street is being marketed by Mark Walker, James Higgie and Sarah Lyford of Bayleys Wellington Commercial, with tenders closing 4pm Wednesday 27th October.
Walker says with childcare-occupied property now an increasingly sought-after asset class and the residential rental market in Wellington gaining nationwide attention for its strong rental rates and short supply, this property is a box ticker for investors.
“It’s one of those properties that hits the sweet spot in the market for returns, location, tenant covenant and underlying land value,” he says.
“With dual income households increasingly the norm, and with the government providing its 20-hours early childhood education funding subsidy to parents, childcare as an investment asset has become in-demand and this is a particularly good example of what investors are looking for.”
The childcare tenancy provides welcoming and well-spec’d space inside, along with a secure outdoor play area.
Tenant Kākāpō Kids is eight months into a three-year lease renewal, having operated from the site for nine years prior, with two further three-year rights of renewal remaining.
“In recent years there has been an uptick in apartment and other housing development in the broader area, with Kāinga Ora committed to building 381 homes in Mount Cook with a mix of studios through to five-bedroom family homes,” says Walker.
“With robust growth fundamentals in the residential catchment, demand for childcare services would seem assured.
“Add in the residential component of the building which is under management and has been competitively rented with minimal vacancy in the 17 years since it was converted, and this property is a winner.”
Located on the first floor, a four-bedroom apartment and a five-bedroom apartment span the full road frontage to Hopper Street, while a six-bedroom apartment is at the upper rear of the building.
Each of the meticulously-maintained and sunny apartments is compliant with the recent Healthy Homes legislation.
Walker says the split income stream is a real strength and is further supported by the knowledge that the Mount Cook precinct has sound intrinsic locational and strategic investment value.
“The city fringe location has many upsides and the flexibility demonstrated by the subject property in Hopper Street would future-proof the asset’s value.”