Childcare to stoke portfolio auctions again
A string of Australian childcare properties will go under the hammer this week with investors set to vye for the highly-profitable sites.
Hundreds of inquiries have been received for the properties in Queensland, Victoria and South Australia which will be sold off during a highly anticipated Melbourne auction at Crown Casino on June 20.
The portfolio includes a Facility located at 10 Goshawk Ct in Caboolture, which carries a 15-year lease to G8 Education – the largest ASX listed childcare provider in Australia.
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A Geelong West property at 149-153 Church St will also be up for grabs, which is to be tenanted by a new centre on a 15-year lease.
Other properties on the list are located in Edmonton in Queensland, Roxburgh Park and Sunshine in Victoria.
The sixth centre is in Reynella in South Australia and the final property at Carrum Downs in Victoria will be sold through an expressions of interest campaign closing later this month.
The childcare facility at Geelong West in Victoria will go to auction on Wednesday.
The highly anticipated Melbourne auction comes as childcare assets continue to surge in popularity, according to Burgess Rawson associate director Adam Thomas.
The commercial real estate agency has sold sites Australia-wide worth more than a combined $320 million in the past 18 months, with properties ranging from $1 million to $10 million.
“Investors are attracted to the stability of this asset class, main road locations in built-up areas and long-term tenant leases underpinned by guaranteed government funding,’’ Thomas says.
“Yields have stabilised and stock volumes continue in an upward trajectory, reinforcing the fact that childcare centres are a highly sought-after investment experiencing exponential growth.”
The sales also come ahead of the Federal Government’s childcare funding reform package in July.
The change will see subsidies increase for average Australian families, which is expected to provide more income surety to centres across the country.
Two recent Victorian sales highlighting the interest in the market include a centre at 117-121 Edwardes St in Reservoir, which presented a yield of 5.63% on a net rental of $408,775 per year.
Another centre in Caroline Springs achieved a yield of 5.4% on a yearly rental of $266,430 with 124 places at the facility.
