Burgess Rawson, the early childhood education and care (ECEC) focused real estate and business broker, has confirmed it will hold its first portfolio auction for nearly three months in a move designed to capitalise on an increase in buyer interest in recent weeks. 

The auction will see five ECEC centre freeholds offered for sale and will provide an opportunity to understand more clearly the impact that COVID-19 has had on valuations and contract terms.  

Commenting on the move Adam Thomas, Director at Burgess Rawson, said that “indications of improvements in investor sentiment towards the sector have been rising in recent weeks and we hope that our first auction since April will give buyers an opportunity to once again secure quality properties again.”

This view was shared by specialist childcare broker Lincoln Bridge Director at Childcare4sale who noted that demand for premium centres from stronger operators was quite firm while highlighting that buyers preferences at this juncture were to ‘push out settlement to September and beyond’ to mitigate short term uncertainties around ECEC sector funding policy changes. 

“We have seen good demand and solid pricing for freehold going concern centres which had occupancy levels above 90 per cent pre-COVID, but are finding settlement periods are being extended as we await policy certainty from the Government.”

With respect to the smaller end of the sector, normally characterised as operators with one or two services, activity remains relatively quiet Mr Bridge said, before noting that the JobKeeper and ECEC relief packages are providing immediate support for operators in this cohort but as we transition through the year it is his expectation that interest from this area of the market will start to pick up again.