Burgess Rawson auction sees strong demand with new record yields achieved in WA

Burgess Rawson, the early childhood education and care (ECEC) focused real estate and business broker, has completed its second portfolio auction of 2021 in which six centres were offered for sale, all of which found buyers with the Sparrow Early Learning Centre in Quinns Rocks recording an all time Western Australia low yield of 5.36%.

Notably, this centre and the Affinity centre in Kelso were purchased before the auction actually took place as investors moved aggressively to secure the assets up front.

Burgess Rawson Director Adam Thomas said, “Once again a strong performance in the child care segment demonstrates that investors are eager to spend with plenty of undeployed capital sitting frustratingly idle.”

“To add to the pent up demand is fresh interest from residential investors who have been outpriced of the housing market. The appeal of essential service tenants; long leases; reliable rent; and strong land values is proving irresistible.”

The combined value of child care centres sold was $33.515 million with yields achieved ranging from 5.09 per cent in Dandenong, Victoria to 6.62 per cent in Brisbane, Queensland.

The auction results were as follows:

• 72 licence place centre in Quinns Rocks, WA currently leased to Sparrow Early Learning sold for $2,720,000 at a yield of 5.36 per cent
• 111 place centre in Dandenong, VIC currently leased to Crest Children’s Sanctuary sold for $7,630,000 at a yield of 5.09 per cent
• 87 license place centre in Maiden Gully, VIC currently leased to Jenny’s Early Learning sold for $3,950,000 at a yield of 5.52 per cent
• 119 licence place centre in Toowoomba, QLD currently leased to Imagine Childcare and Kindergarten sold for $6,630,000 at a yield of 5.39 per cent
• 75 licence place centre in Kelso, QLD currently leased to Affinity Education sold for $2,435,000 at a yield of 6.11 per cent
• 147 licence place centre in Brisbane, QLD currently leased to Brisbane City Child Care sold for $10,150,000 at a yield of 6.62 per cent

“Of particular note in this auction was the very strong demand for the Sparrow Early Learning Quinns Rock centre which achieved an all time record low yield for the region of 5.36 per cent,” Mr Thomas said, “That is very exciting and another example of just how important the child care sector has come to investors.”