Four more childcare centres deal at sub-5pc yield

Home Consortium’s Tarneit centre was acquired in December at a 5.75pc yield which the agents said was the lowest in Melbourne’s west since 2017.

A month since Cushman & Wakefield sold a childcare centre for a price reflecting a milestone sub-five per cent yield, rival Burgess Rawson today divested four more.

The two year old Williams Landing property still offers depreciation benefits.

In its biggest and best deal, an Explorers Early Learning backed complex in Williams Landing traded at a bulk auction event for $10.98m – a 4.75pc net return.

Two more Melbourne investments of this type achieved a similar result – at Noble Park ($6.742m, a yield of 4.78pc) and Truganina ($6m/4.9pc).

A Nido Early School leased asset in Perth’s Balcatta rounds out the four, collecting $4.325m.

That price reflected a 4.99pc return.

“A Hong Kong investor who was bidding over the phone was…the underbidder on both the Noble Park and Williams Landing childcare centres, before purchasing One Early Education Group [in Truganina],” Burgess Rawson’s Zomart He, Natalie Couper and Adam Thomas said.

“Childcare/early education is…one of Australia’s most sought-after asset classes, with the federal and state government’s providing record funding of $10.5 billion in the 2019/20 financial year,” they added.

Last month, the Cushman marketed property at Raymond Terrace, north of Newcastle, traded at a 4.67pc yield (story continues below).

Explorers Early Learning, Williams Landing

The Williams Landing complex, 2 Fogarty Street, contains 1096 sqm of area and is licensed for 168 clients.

Explorers is on a 15 year lease with fixed three pc rent rises; with options, it can stay until 2064.

The agents said the investment has a consistent 95pc-plus occupancy rate.

The 2900 sqm corner block is about 600 metres from Williams Landing Shopping Centre and 20 kilometres from town.

In December, Home Consortium outlaid $6.6m for a new Tarneit facility – reflecting a 5.75pc yield, which the agency said was the sharpest return for an asset of this type in Melbourne’s west since 2017.

Not long earlier, an operator, the Agosta family, pocketed $11.5m from a West Footscray centre offered with a 20 year leaseback. That deal reflected a 5.9pc return based on its gross rent.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of