This article is from the Australian Property Journal archive
THE three-level Little Zak’s Academy building in Sydney’s lower north shore suburb of Artarmon has changed hands for $21 million, believed to be the heftiest price tag for a single-tenant childcare centre in Australia.
The 3,222 sqm building at 6 Clarendon Street is on a 1,208 sqm site and sold with brand-new 10-year triple-net lease to Affinity Education Group with options until 2052, returning $1.26 million per annum net.
The sale price reflected a 6% net yield, and a suburb record land rate for the suburb of $17,384 per sqm.
CBRE’s Aaron Arias, Toby Silk and Nicholas Heaton negotiated the sale.
Affinity owns and operates almost 170 childcare centres across Australia. Little Zak’s Academy approval for 210 places.
Average yields for childcare centres tightened from 7.58% to 5.84% from 2013 through to 2017, according to research by Burgess Rawson.
Despite supply increasing by 550% between 2013 and 2014, yields compressed further by 10% in that period.
Burgess Rawson director, Billy Holderhead, said the sector’s sales history showed that compression yields and greater price volumes had continued despite increased supply.
“Therefore, equilibrium, where demand is met, in our opinion has not been reached,” he said. “We see this trajectory continuing into the foreseeable future.”
Australian Property Journal
