Rocky childcare centre sells for $2.3m at Melbourne auction

Published on: 16/10/2020
Rocky childcare centre sells for .3m at Melbourne auction

A ROCKHAMPTON childcare centre sold for $2.3 million late last month.

At an auction in Melbourne on September 23, the home of Guppy’s Early Learning Centre at 337 Dean Street sold with an expected 6.2 per cent annual yield.

Burgess Rawson childcare specialists Jamie Dewe and Doug Doyle, who sold the property, said there was a lot of interest at the auction.

“It’s really good at the moment, especially in the childcare sector,” Mr Dewe said.

“Buyers did hold off initially when COVID was announced, but they’re all back in the market now, especially for properties with long-term leases and really good operators.”

Mr Dewe said the sub-$3 million price bracket was popular for child care centres and that things were “really kicking along” at the moment thanks to low interest rates.

He said that location and government support were other factors that drew investors to six Queensland childcare site sales in the past two months.

“Over the last financial year, we transacted $49 million worth of Queensland childcare properties, with five recent sales achieving outstanding yields,” Mr Dewe said.

“Childcare freeholds are hot property for a range of investors, offering strong returns and a wide range of entry points, which we see reflected in our varied enquiry levels which have increased in recent months.

“Interestingly, all of these sales were snapped up by local buyers.”

The Guppy’s centre was one of 11 properties across the country up for sale as part of a Burgess Rawson Portfolio Auction that garnered $43.3 million in combined sales at a clearance rate of 85 per cent.

The Rockhampton property sold on a 10-year lease with options to extend that to 2050.

It is a 3,627 sq m site with 24 carparks.

“Buyers are becoming increasingly savvy, seeking strong covenants with long term leases – both of which this asset class offers,” Mr Doyle said.

“For many investors, the long-term value of quality tenants in secure childcare assets is hard to beat, with many centres tenanted on new net leases with lengthy options to 2050.

“The sector’s continued backing by Federal Government support has injected an additional $1.6 billion of funding to the sector – another huge tick for the assets’ appeal.”

By Timothy Cox, The Morning Bulletin

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