Childcare centre sells for record $21m as confidence in sector is restored
Written on the 24 April 2018 by Paris Faint
A childcare centre in Artarmon has sold for a record $21 million, which marks the largest sale of a single tenanted childcare property in the country.
The sale of the three-storey centre at 6 Clarendon Street was negotiated by CBRE and attracted a yield of 6 per cent.
The property is currently tenanted by Affinity Education Group and CBRE's Toby Silk says its sale proves there is strength in the market which has recently been perceived as saturated.
"At the tail end of 2017, childcare investments took somewhat of a blow in the market, largely due to oversupply and availability of education and child care permitted sites," says Silk.
"However, in suburban areas such as the north shore, that are popular with young families and typically have higher median household incomes, the requirement for private childcare centres remains strong and this is boosting investment in the sector.
"Artarmon is a well-performing growth suburb, and its thriving commercial precinct provides an overwhelming demand for childcare in the suburb."
The sales campaign for 6 Clarendon Street received more than 180 enquiries from potential buyers who were attracted by its national tenant, as well as impending lifts to the childcare capped benefit scheme by the Federal Government.
"It seems the removal of the benefit cap is making ripples nationally, and particularly in the northern Sydney market," says Silk.
"The threshold lift is encouraging consumer uptake of childcare services, and as a result we've noticed confidence being restored in the sector."
Over the past year, the CBRE team has sold nine childcare centres including the Nino Early Learning Adventure centre in Malvern for $16.9 million and 65 Roseneath Drive in Parkinson, Queensland for $12 million.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Author: Paris Faint