This article is from the Australian Property Journal archive
A PREMIUM early education centre in Alexandria has sold for $8.5 million, on a yield of 4.89%, reinforcing the strength of the ELC sector.
Located at 4B Huntley Street, around 5km south of the Sydney CBD, the 90 Long Day Care (LDC) place centre encompasses a total land area of 2,387sqm.
Michael Vanstone from Burgess Rawson managed the sale via an expressions of interest campaign.
“The year 2024 has kicked off with a bang, marked by strong results and increased enquiries,” said Vanstone.
“Positive economic indicators, including a significant reduction in inflation and the anticipated pause on interest rate hikes, create a sound foundation for the months ahead.”
The property features a 5-year net lease to 2034, with 10 + 10-year options stretching to 2054 to Story House, a leading national education provider, which boasts a network of more than 50 centres.
The net annual rental is $415,415 per annum with compounding 4% annual rent increases.
“The early education sector continues to be recognised as an essential service and one of Australia’s most sought-after asset classes. Unprecedented support from both Federal and State Governments is evident, with a projected $10.7 billion in funding for the 2022-2023 period,” added Vanstone.
“An additional $4.7 billion is dedicated to the Cheaper Child Care Reform, enhancing affordability for approximately 1.2 million families, effective since July 2023.”
Burgess Rawson negotiated almost $200 million in early education sales over the first three quarters of 2023, with demand for the asset type surging over the year.