Childcare centres still a playground for investors

Childcare centres have surged back into the news in the wake of the sale of a Casey tenanted property that sold for more than $6 million in Sydney on Tuesday.

And a 1943-square-metre Rivett childcare site sold for $1,450,000 the same day.

Burgess Rawson Canberra managing director Guy Randell says the hammer price of $6.45 million made the Casey Springbank Rise Early Learning site one of the biggest childcare centre sales in Australia.

The 2314-square-metre property at 25 Andersch Street can accommodate 126 children and comes with a 12-year lease to 2027 – with further three-to-five-year options available.

“Canberra has shaken off its poor cousin tag and become nationally competitive through quality assets and investments,” Randell says.

“And there’s no doubt that childcare centres are viewed as a strong asset class – as strong as service stations or fast food outlets as far as investors are concerned.

“What they like is stability, steady growth and long-term growth – and the fact that childcare centres can hit 80 per cent occupancy in their first year.”

Randell also believes the sale has put to rest the discussion on the viability of quality childcare centres in Canberra. In an earlier interview with All Homes he said parents determined the level of need.

“There has been a lot of media reporting recently that’s questioned whether the market for childcare centres is in under-or-over supply,” he says.

“The reality is, it is the market – parents – who are demanding more of them and they want them run by quality, proven operators who offer great early childhood learning programs.”

Burgess Rawson is a relatively new entrant into the Canberra market, but it is a leader in childcare sites in Australia and has sold some 150 in the past three years.

“From an investor’s perspective, childcare centres represent a safe, long-term investment that is enhanced by the quality of the operator,”  Mr Randell says.

“We’re getting a lot of interest from investors, not only regionally and nationally, but also from overseas.”

Mr Randell says demand is not only coming from new centres such as Throsby and Gungahlin, but also from areas undergoing urban renewal.

“Some of the older centres may not be able to offer the facilities and programs that parents are now demanding and that creates demand for new sites,” he says.

Who’s in the market: Investors searching for a secure, long-term investment property.