Investors Line up for Childcare Assets

Investor demand for childcare assets is on the rise, underpinned by the community’s need and the high yields generated by the consistent and inflation-linked rents at a time when interest rates are rising. It comes amid election promises made by the Labor Party that should it win the federal election, it will lift the maximum childcare subsidy rate to 90 per cent for families for the first child in care, and increase childcare subsidy rates for every family with one child in care and who earn less than $530,000 in household income.

In the Burgess Rawson March portfolio sale, childcare assets were in high demand, with one selling at Merrylands in Sydney for $7.1 million on a yield of 4.25 per cent. Another recent sale was an asset at 38-40 Lumsdaine Street, Picton, which was sold for $5 million by Ray White Commercial (SC) principal Samuel Hadgelias with Jai Sethi and Victor Sheu of Ray White Commercial Western Sydney.

There are currently 647 childcare projects in the development pipeline across NSW, with 545 in Greater Sydney, and 100 in regional NSW.