Childcare takes off at Burgess Rawson auctions

Last year’s childcare boom appears to be gathering even more steam, with almost $20 million worth of childcare centres sold at the first Burgess Rawson investment auctions of 2017.

All eight centres put on the block across two days of auctions in Melbourne and Sydney were sold, alongside highly sought-after supermarket and service station assets.

Three of the eight childcare centres – all built by Childcare Specialists Melbourne – sold on yields below 6%, with a centre at Pimpana in Queensland, leased to Eclipse Early Education, selling for $4.5 million.

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Another centre in Pakenham, Victoria, leased to Amiga Montessori until December 2031 sold for $5.12 million on a yield of 6.2%.

Further centres in Punchbowl, Green Point and Tamworth in New South Wales, Frenchville and Townsville in Queensland and Benalla in Victoria were also snapped up.

The Coles-leased supermarket in Ferntree Gully sold on a 4% yield.

But the headline act at the Melbourne auction was undoubtedly the Coles-leased supermarket at Ferntree Gully in Melbourne’s outer east.

The freestanding supermarket, leased to Coles with options to 2027, sold for $10.5 million on a narrow 4% yield.

Burgess Rawson director Jamie Perlinger says the ageing supermarket’s scope for improvements flashed as a beacon for potential investors, with a number of bidders fighting each other hard for the 2212sqm building, which lies 30km east of Melbourne’s CBD.

The Woolworths Caltex at Hervey Bay in Queensland.

“People are looking for that national tenant, and Coles being one of the biggest in the country always attracts a lot of attention,” Perlinger says.

“The supermarket had a lot of upside to it, and that’s probably the reason why it was such a sharp yield as well.”

A pair of service stations also sold well, with a Coles Express at Bacchus Marsh in Victoria trading for $4.55 million on a 5.3% yield, while a Woolworths Caltex at Hervey Bay in Queensland went for $2.405 million on a 5.6% yield.