Investors spend $18.3 million on Australian childcare centres yesterday

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 of 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 the sites with colleagues Billy Holderhead and Shaun Venables.

Yesterday’s deals

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

Story 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 stay at 173 Bluff Road, until 2053.

Based on the annual rent it pays ($255,453, plus GST and outgoings), this investment is trading on a 5.1 per cent passing 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 Holder said.

In Nundah, eight kilometres north east of Brisbane, a new centre at 254-258 Buckland Road (pictured, top) 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 $1.85 million.

Rented for $290,500 annually, 15-17 Stitt Street is selling on a yield of 7.6 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, this asset, 13 Wilder Street (pictured, below), is exchanging on a 5.1 per cent yield.

The Hammondville complex in Sydney occupies a 1100 square metre block.

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Marc Pallisco

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

Marc Pallisco