This article is from the Australian Property Journal archive
MAYFIELD has added seven childcare centres in South Australia to its portfolio, entering an exclusivity agreement and a $4.8 million conditional offer to acquire the assets and business of Precious Cargo.
Mayfield will immediately commence management oversite of Precious Cargo’s head office staff and the centres in Blackwood, Collinswood, Lockleys, Marion, St Peters, Westbourne Park and Woodville Park.
Across the centres there are a combined 882 approved places, amidst an ongoing childcare demand and supply imbalance.
With recent demand for childcare facilities across the country surging to a new peak, drawing investor interest with revenue expected to grow by 6.2% over 2023-24.
Precious Cargo has four remaining underperforming centres that will not be acquired by Mayfield and will cease to carry the Precious Cargo brand.
The transaction includes the business assets, including brand name and related intellectual property of Precious Cargo.
The transaction will be funded from existing working capital and Mayfield’s acquisition facility, with settlement anticipated for Q3 2024.
Asian investors have increasingly been focused on alternative real estate investments in Australia, including childcare assets, with more than $50 million worth recently changing hands with yields as low as 4.63%.
While in April, one of Victoria’s largest childcare centres was transacted for $12.8 million on a yield of 5.3%. Just weeks after the $17.5 million sale of a childcare centre in upmarket Brighton set a new benchmark for the sector. A Bentleigh childcare centre also traded recently for more than $6.7 million, on a 4.7% yield.
With the latest Burgess Rawson national portfolio auction event was headlined by the $7.78 million transaction of the Affinity Education Early Education Centre in Killara, on the Upper North Shore, on a sharp yield of 4.14%.
