Investors outlay $15.5 million on Victorian childcare centres

The Bayswater North childcare centre sold at auction on Wednesday for $5.95 million.

Investors outlaid $15.5 million to snap up three Victorian childcare centres this month.

All were supposed to be auctioned at a Burgess Rawson event on Wednesday.

Instead, only one went under the hammer – the priciest, in Melbourne’s Bayswater North (pictured top and right), which sold for $5.95 million.

About 28 kilometres east of the Melbourne CBD, the modern facility at 187 Canterbury Road was offered with a 20-year lease and traded on a 6 per cent yield.

It is within a bulky goods retail strip with neighbours including Bunnings, Foodworks, Officeworks and Spotlight.

In Tarneit, 25 kilometres west of town, Burgess Rawson sold a childcare centre at 466-468 Sayers Road – alongside two local schools – before auction.

Leased to G8 Education, it traded for $5 million, a deal which reflects a 6.1 per cent yield.

Meanwhile in White Hills, near the regional town of Bendigo, 384-386 Midland Highway (pictured, bottom) also found favour with a buyer, prior to Wednesday’s public sale event.

The new 4046 sqm facility is leased to Amiga Montessori which, with options, can stay on until 2059.

The $4.55 million paid for this investment reflects a 6.4 per cent yield.

Childcare centres have become one of the highest profile segments of the social infrastructure class in recent years, with investors including institutions.

Last October prominent Brisbane based operator, Mike Wu, unveiled plans to build Australia’s largest childcare centre in South Melbourne.

The investor and developer a month earlier listed for sale a portfolio of seven childcare centres with leasebacks.

“Childcare centres have picked up right where they left off last year, further increasing in popularity due to their long-term security and outstanding tenancy profiles,” the agency’s childcare specialist, Natalie Couper, said.

The broker added buyers of the three sites Burgess Rawson marketed were attracted to long leases, the quality of the operators and that the properties were in central locations.

With options, the occupier of this White Hills childcare centre can stay on until 2059.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco