Childcare centre demand high as five development sites sell across western Sydney
There has been a blitz in sales of childcare centre development site across Sydney.
The demand for childcare centres across Sydney has ramped up with five childcare development sites selling in 30 days in the western suburbs.
The sites, at Rooty Hill, Bankstown, Guildford, Auburn and Toongabbie, sold for a total of $14.2 million.
It comes as a childcare centre, which was formerly a church, in the inner-city suburb of Rosebery sold after an aggressive bidding campaign for around $5 million.
Ray White head of research Vanessa Rader said childcare remained an attractive asset class.
“The strong government subsidies on offer have ensured that occupancy levels remain elevated and rental growth built into most lease structures is attractive,” Ms Rader said.
There’s been a recent spate in childcare centre development site sales.
Ray White Commercial’s head of research Vanessa Rader said childcare centre sites were “attractive assets”.
MORE:
Spanish Mission house sells for $69m
Mystery buyers of $30m Bronte home revealed
Trade commissioners’ cottage goes up for auction
“While transaction volumes for established assets are down, there has been an uptick in development assets coming to market this year.
“The strong population growth experienced across the country has resulted in many of these developments able to secure precommitment tenants and leasing activity has seen improvement.”
The western Sydney sites, sold by Ray White Commercial Western Sydney director Joseph Assaf, senior sales executive Jai Sethi and sales associate Andrew Sacco, were bought by childcare owner operators and will provide 421 childcare places.
Mr Assaf said demand for the sites had been strong.
An approved childcare centre at 106 South Terrace in Bankstown has sold for $2,275,000. Image is an artists impression.
Artists impression of an approved childcare centre in Rooty Hill, with the site at 11-15 Orcam Lane selling in March.
“Owner operators are keen to cut out the development approval and pay a premium for already approved sites that can start straight away,” he said.
“Demand has been very strong, and that led to competitive bidding in the case of the Auburn and Toongabbie sites which were sold at auction, with multiple offers received for Rooty Hill, Guildford, and Bankstown including short settlement terms to secure the sites.”
Mr Sethi said the demand for childcare services had remained robust.
A childcare development site at 38-40 Albert Rd in Auburn has sold for $3.4m.
Artists impression of the childcare development site at 264 Metella Rd Toongabbie which sold in March 2023.
Another development site at 58-60 Berwick St Guildford sold for $3,550,000 in April
MORE
Cheaper alternatives to dream Sydney postcodes
Grim reality of Sydney rental crisis revealed
“Driven by the government’s strong support for the childcare sector, and the upcoming increase in subsidies up to 90 per cent from July 2023, childcare operators are aggressively expanding their businesses to capitalise on the sustained demand,” he said.
It comes as a Rosebery childcare centre, which was formerly a church, sells for around $5m.
The site, at 34-36 Dalmeny Ave, was sold for the first time in 50 years by Ray White Commercial (SC) agents Samuel Hadgelias, Leslie Li, and Baxter van Heyst on behalf of the Greek Orthodox Parish of St Spyridon Sydney.
Mr Hadgelias said the property, which has approval for a 59-place childcare centre, had 150 inquiries.
“The property was sold to a local childcare operator looking to expand its brand,” he said.
Mr Li said the majority of interest came from owner occupiers, with some inquiries from developers.
A childcare centre at 34-36 Dalmeny Ave, Rosebery, sold in April.
The centre in Rosebery was formerly a church.
“The property is located in a popular suburb on a large, flat block of land close to amenities with easy access to arterial roads into and out of the city,” he said.
“The property had an existing service approval for childcare which was a huge contributor to the interest.”
Mr van Heyst said there was a strong demand for childcare assets.
“Childcare as an asset class is possibly the most in demand asset in the commercial space at the moment,” he said.
“Vacant existing centres are very desirable for owner operators.”
The Rosebery listing stated that childcare an “asset class” had been popular over the last decade, due the demand for “set and forget” assets like service stations and fast food.
MORE: Crypto Kings’ staggering wealth revealed
