Burgess Rawson sees $200m of transactions year to date as ECEC listings jump 22%
Burgess Rawson, the early childhood education and care (ECEC) focused real estate and business broker, has confirmed a surge in transaction activity with almost $200 million in sales brokered over the first three quarters of 2023.
Recent freehold sales include Jungle Zoo ELC in Mandalay, QLD which sold for $5.65 million, Bower Education in Kingswood, SA which was snapped up for $5.85 million, and a Guardian Childcare & Kindergarten centre in Seven Hills, NSW which transacted for $7.575 million.
Burgess Rawson director, Michael Vanstone highlighted that listings across the country have grown by 22 per cent over the past nine months, compared to the same period of 2022.
“Expectations of ongoing rate rises combined with mixed messages provided by market commentators and the RBA had led to a confusing environment and a slowdown in sales over 2022,” Mr Vanstone said.
ECEC freehold yields increased moderately in early 2023 to around 5.30 per cent but pressure to rise above that has been limited with the last 30 sales averaging 5.27 per cent.
“Despite cash rate rises, lack of supply and increased demand for these defensive assets has reversed the trend, and vendors see the opportunity to maximise on the positive market sentiment,” he added.
The strong recent transaction performance has seen Burgess Rawson clock up $2.2 billion in ECEC transactions to date, a substantial achievement.
Burgess Rawson Partner and Queensland Managing Director, Adam Thomas said Burgess Rawson has proven itself as the market leader negotiating 77 per cent of Australian childcare centre investments over the past 18 months.
According to the Burgess Rawson Early Education Industry Insights report, early education rents per place have risen by almost 15 per cent since early 2022, to now average $3,518 per place, per annum in line with increased government funding, rising land values and construction costs.
Early education rents have grown 87 per cent over the past decade and by 27 per cent since 2020 alone. Rents in NSW have increased by 46 per cent since 2020, taking the cost to average $3,696 per place.