This article is from the Australian Property Journal archive
MORE than $38 million worth of childcare centres in Victoria and Queensland have changed hands as investor continue to look for assets in the sector.
Headlining the recent results was the $7.9 million sale of the Play & Learn Childcare The Gap in north west Brisbane. A regional Queensland-based private investor bought 10-14 Payne Road on a yield of 4.84%.
The fully refurbished 112-place facility is set across a 1,962 sqm site and secured by a 20-year lease to 2039.
Stonebridge Property Group’s Tom Moreland, Michael Collins, Rorey James, Kevin Tong and Thomas Proberts did the deals.
They also sold a pair of facilities in Toowoomba. The 2020-completed Story House Wilsonton, at 23-25 Erin Street, sold for $5,420,000 to a Melbourne-based private investor and set what the agents said was a record low yield of 4.75% for a regionally located childcare centre in Queensland.
Nearby, another Story House leased facility in North Toowoomba sold for $3,870,000 at a 5% yield. Both Story House centres have 20-year net leases.
Additionally, three childcare centres have sold off-market prior to completion. An Eden Academy Childcare development in Melbourne’s growth suburb of sold off the plan to an active childcare fund for $7,648,000, at a yield of 4.92%. The property situated at 32 Origin Drive, will carry a new 15-year lease through to 2038 plus options.
In Townsville, an Imagine Childcare development in Bushland Beach sold to a Brisbane-based private investor on a “fund-through” basis for $6,575,000, at a 5.25% yield. It is also due for completion in early 2023 and will have a 20-year net lease to 2053 plus options.
Another development, at 1 Alma Road, 35 kilometres north of the Brisbane CBD, sold to a local private investor for $7,350,000 at 5%. Directly adjoining a Woolworths shopping centre, the new facility will be operated by Journey Early Learning on a new 15 year term through to 2037 plus options, with fixed 2.75% annual rent increases.
Moreland said the sales indicate the childcare investment market remains buoyant, “despite ongoing rhetoric surrounding the rising cost of debt and a softening of yields”.
“We continue to witness high net worth private investors pursuing assets within defensive industries, particularly those providing annuity style income via long term leases to proven covenants”
Collins said the federal government’s $10.3 billion anchor for the sector, growing by a further $1.7 billion over the next three years, is also driving demand.
