Free rent, $1m reno offered to childcare centre buyers as part of National Coptic Childcare Alliance Industry Gala Event
A Western Sydney education group is appealing to potential operators who want to get into the industry by offering a childcare centre at auction with no reserve price.
Thrive Early Learning is offering up one of its daycare chain centres in Merrylands, in Sydney’s west, with developer Clutch Capital offering to fund around $1m – $1.5m to fit out the 91 place DA-approved site in exchange for a 15 year lease of market value rent.
The winning bidder will be able to operate the centre with no developer fees or an ongoing contribution, and will also have six months free rent.
The deal also allows the successful buyer of the space to start operating the childcare centre immediately after – a rare opportunity for childcare centres in Australia.
The offer is part of The National Coptic Childcare Alliance (NCCA) Industry Gala Event on the 29th October, with NCCA Executive Carl Elassal saying the auction will give someone a leg up into the industry.
The property has no reserve price, which means it theoretically could sell for as little as $1 if no other bid is placed, but the NCCA expects it will fetch around $600,000-$700,000.
The developer is offering to fit out $1m-$1.5m of the 91 place DA-approved site.
If the property was likely to sell for $20,000, Mr Elassal would step in and buy the property as well as donate the cost of the build.
Mr Elassal said the childcare property market had been booming, with commercial property investors lining up to turn a profit on the industry.
“It’s a first of its kind auction, so I think it will create some hype, but this a genuine opportunity,” Elassal said.
“We know there’s a desperate need for childcare places, especially in Western Sydney and this is a chance for someone to start their own business in an area of urgent need.”
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National Coptic Childcare Alliance Executive Carl Elassal
“Merrylands in Sydney’s west is a high demand area with a children to place ratio of four to one. That is, for every childcare place available, there are four children needing it.”
The operator will need to invest about $100,000 on furniture and play equipment like bikes, easels and art supplies.
The annual market rent is approximately $380,000 for a 91 place centre.
Childcare provider Thrive Early Learning Centres is sponsoring the prize, in conjunction with the developer.
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The operator of the childcare centre will need to invest $100,000 in furniture, play equipment and art supplies.
“This will not be a franchise. The childcare centre will be called whatever the winning bidder wishes.
“This is a massive opportunity, really it’s a once in a lifetime chance for someone to get into the childcare industry as an operator. It’s really hard to break in otherwise.
“Usually a developer would charge at least a million dollar contribution for a centre plus a yearly percentage of the fees while to buy an existing 90 place centre could cost as much as $4m in goodwill.”
The winning bidder will receive the centre with no developer fees or an ongoing contribution, and will also have six months free rent.
Elassal said the live charity auction could see the childcare centre snapped up way under market value.
“It will really depend on who is in the room on the day.”
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