Childcare investments reap $43m – Burgess Rawson

Socially conscious childcare developers and operators alike, are reaping the rewards of energy efficient centres with investors paying a premium for these cutting edge assets.

Burgess Rawson has sold six early learning centres over the past few weeks plus a substantial business taking the combined sales total to over $43 million.

The highlight was the $9.92 million sale of a brand new early learning investment positioned in the rapidly growing Western Sydney region of Gledswood Hills. The energy efficient centre, in Digitaria Drive will be occupied by Futuro Early Learning on a secure 20-year lease plus options. The sale price reflected a net yield of 5.1%.

Burgess Rawson Director, Michael Vanstone said the property was snapped up by a government-based buyer who was attracted to the centre due to the exceptional quality of construction and the new breed of socially conscious operators who are setting the standard by being carbon neutral.

Developed by leading education property specialists, Jeckra, the Gledswood Hills centre exemplifies Jeckra’s core beliefs of providing a sustainable and energy efficient product for its clients.

Jeckra has worked on over 80 childcare centre projects across Australia delivering some of the country’s most innovative early learning environments.

Jeckra Managing Director, Gavin Jennings said, “since our inception 10 years ago, we have been working to create innovative buildings and childcare spaces that adopt sustainable technologies and materials to ensure a low operating carbon footprint for operators.

“There’s been a big shift in demand for this product in recent years and the need to keep up with technology and best-practice construction methodology is crucial to stay relevant in the market.

“Operators moving into new centres are now, more than ever, requesting sustainable initiatives be incorporated into lease inclusions, which in turn is attracting interest from a wider base of potential buyers,” he said.

Mr Jennings said they have four other projects to come on stream with an end value totalling $35 million.

The centres are all located in emerging greenfield suburbs benefitting from future infrastructure hotspots.

Mr Vanstone commented that these quality early learning centres appeal to a range of buyers, but high net worth individuals remain the primary investors of early learning centres as they are attracted to the ease of ownership or commonly coined ‘set and forget’ aspects of these investments.

He said interest has certainly pepped up over 2023 despite the increased interest rates primarily due to the robust recession-proof nature and quality of the properties on offer.

Other deals brokered by Burgess Rawson include the $4.65 million sale of a centre at Lake Cathie while in Belfield (Sydney) a centre sold for $5.45 million and in Seacombe Gardens, South Australia, a centre sold for $6.97 million.

Mr Vanstone said yields ranged between 5.1 per cent and 5.8 per cent for the six properties sold.

He added that he also sold a childcare business in the Inner West for $6.7 million.