Although the Covid-19 pandemic has made choosing where to invest something of a challenge over recent weeks, strong investment opportunities do exist and can deliver a desirable return.
The early childhood education sector will be at the top of list, with daycare centres typically located in big catchment areas, enjoy a steady income, and allow investors to gain exposure to an industry backed by government funding.
Toby Hunn, business development manager at property syndication specialists Erskine and Owen, says early childhood education is a growing business sector, and a growth investment market.
“The early childhood education sector receives funding from the Government. Without daycare providers, there would be many parents unable to work. Therefore, the continued support from government will be more important than ever, to keep parents in employment, and fuel the economy back to full strength”, he says.
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Erskine and Owen has launched a new syndication offer to wholesale investors for a portfolio of five established and fully tenanted daycare centres around New Zealand. The syndication offer has a projected pre-tax cash return of 7 percent per annum, paid monthly, and is valued at $15.55 million.
The properties are located in Auckland (Silverdale and Papatoetoe), Pokeno, Tuakau and Dunedin. All five centres are run by experienced operators and have a combined weighted average lease term of 12.5 years, due to 10–15 year leases in place.
Hunn says: “We have proceeded to settle on four of the five properties so the investment is now live. We managed to negotiate a rent retention scheme with the vendors, to protect the rental income for the duration of the lockdown period. The fifth property is due to settle shortly.”
The offer follows the successful closure of Erskine and Owen’s syndication of Wattie’s national distribution centre in Hastings, and a 755sqm office complex in Dunedin.
