Investors spend $18.3 million on Australian childcare centres yesterday

Published on: 16/12/2019

Five Australian east coast childcare centre investments sold for a total of $18.311 million to separate buyers yesterday.

The assets formed part of a portfolio of 16 properties which traded at a bulk auction event, held by Burgess Rawson at Melbourne’s Crown Casino.

Most are exchanging on passing yields between 5 and 7 per cent, which agent Raoul Holderhead said reflects the ‘remarkable turnaround’ in demand for this property type, this year.

The agent marketed one site while colleagues Adam Thomas, Natalie Couper and Zomart He marketed the remaining four that sold.

An ‘as new’ 512 sqm complex built into a double storey dwelling, in Melbourne’s bayside Black Rock, traded for $5.055 million.

Storey House Early Learning signed a 15-year lease for the property last year. In 2033, it will be presented with renewal options, potentially seeing it star at 173 Bluff Road, until 2053.

Based on the annual rent it pays ($255,453, plus GAST and outgoings), this investment is trading on a 5.06 per cent yield.

At Ararat, about 200 kilometres west of the Melbourne CBD, a centre at 17 Wilson Street found a buyer prior to the scheduled auction.

Based on the $2.73 million sale price, and rent paid by Village Early Education, this investment is selling on a 6 per cent yield, Mr Holderhead said.

In Nundah, eight kilometres north east of Brisbane, a new centre at 254-258 Buckland Road was knocked down for $4.975 million.

Leased to Edge Early Learning until 2044, with options, this 81-place, 581 sqm double storey, offered depreciation benefits.

At Innisfail, 90 kilometres south of Cairns, a modern double storey childcare centre licensed for 85 places and leased to Pelicans, sold for $1.825 million.

Rented for $127,308 annually, 15-17 Stitt Street is selling on a yield of 6.98 per cent.

An investment in Hammondville, 31 kilometres south west of Sydney, found favour with a buyer who outlaid $3.701 million.

Occupied by St George Montessori, which pays annual rent of $190,000, the asset at 31 Walder Street, is exchanging on a 5.1 per cent yield.

Written by Marc Pallisco,


Stay up to date with our latest portfolio auctions & insights