Economics
Property
Western Sydney childcare centre sells for $3.18 million
Freya Lucas
Oct 03, 2018
Save
An 80-place childcare service, located in western Sydney, sold at auction in September for $3.18 million, with five registered bidders competing for the property, which sits over a double block of 1,338 sq m at 20 and 22 Ostend St, South Granville.
With two separate childcare facilities, and a history of strong occupancy, the centre, which is leased to Little Learning School, an award winning group operated by Only About Children, is tenanted to 2028, with options to 2048.Speaking with the Parramatta Advertiser, Burgess Rawson’s childcare specialist Michael Vanstone outlined a variety of factors which contributed to the price attained at auction, noting the higher than average numbers of children aged 0-5 in the suburb as a draw card for investors.
“The suburb also has a considerably high 0-5 years age group at 7.92 per cent compared to the NSW average of about 6 per cent and its population growth rate is also higher – these are great numbers when you are looking at having an asset like this under your belt,”
Additionally, Mr Vanstone outlined the variety of improvements made to the property in preceding years, including upgrades of the internal rooms and external play spaces, which feature a number of established trees and natural playscapes.
Granville, an established suburb of Sydney, within 6 km of the Parramatta CBD, has a median age of 32, and the presence of local amenities such as a TAFE, schools, shops and parks, as well as cafes and restaurants contribute to the appeal of the area for young families.
The purchaser was a private buyer, who had been looking to add a childcare centre to his investment portfolio, and to capitalise on the 5.82 percent yield.
With attractive rental growth, yearly increases of the greater of CPI and 4 per cent, plus market reviews every five years, coupled with attractive lease terms, and a net income of $185,000 pa + GST, the property represents a sound investment for the purchaser.
Don’t miss a thing
Related Articles
