Burgess Rawson kicks off May with $43.5m of sales and a record low yield of 2.75% for a Goodstart centre

Burgess Rawson, the early childhood education and care (ECEC) focused real estate and business broker, recently confirmed the sale of $43.5 million in early education centres, a strong showing for the sector despite persistent interest rate rises.

Burgess Rawson director, Michael Vanstone said the blended yield for the month so far was 5.18 per cent, down slightly from the 5.30 per cent achieved throughout the March quarter.

“Early education properties are predominantly sought after by investors seeking secure, long term bricks and mortar assets,” Mr Vanstone said.

“The federal government’s confirmation of additional childcare support has also strengthened demand.”

A total of ten sales were achieved in under a week including a vacant childcare centre in East Hills, NSW, which sold to a local operator for $3.977 million. If leased at the projected annual rental of $176,000, the property would return 4.43 per cent.

The sale follows the record result achieved for the Goodstart Early Learning Centre in Mosman which sold for $4.41 million on a yield of just 2.75 per cent, the lowest ever recorded for this class of investment.

In Western Australia, Children’s House of Early Learning in St James sold for $1.18 million showing a yield of 4.66 per cent while Lex Education in Forrestfield sold for $3.701 million, reflecting a yield of 5.78 per cent.

In Melbourne, Montessori Academy in Forest Hill sold for $6.9 million showing a yield of 5.1 per cent while Story House Early Learning Centre in Melton sold for $5.75 million reflecting a yield of 5.3 per cent.

Queensland saw the Affinity Education Centre in Taigum sell for $7.125 million providing a return of 5.33 per cent while Mayfield Early Education in Gordonvale sold for $4.775 million showing a yield of 5.5 per cent.

Mr Vanstone said increased interest rates have not dampened demand for these assets with the market set to remain strong.

“While the Mosman property had the added bonus of a blue ribbon address, the East Hills property showed the strength of emerging growth suburbs, spurred on by increased development and immigration” he said.