Burgess Rawson’s May auction sees strong demand as sub 5% yields become the norm

May 18, 2021

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Burgess Rawson, the early childhood education and care (ECEC) focused real estate and business broker, has completed its third portfolio auction of 2021 in which five centres were offered for sale, all of which found buyers, with four achieving yields of less than 5 per cent.

“Demand for ECEC centres continues to be incredibly strong. All of our centres offered found buyers, with four recording yields of below 5 per cent, and one, located in Western Australia, substantially breaking a yield record that was set just six weeks ago at our last auction,” Burgess Rawson Director Adam Thomas said.

“The type of sustained and broad investor interest in the sector is very encouraging. The appetite for essential service tenants with long leases and strong land values is still an irresistible combination for investors.”

The combined value of child care centres sold was $30.557 million with yields achieved ranging from 4.75 per cent in Williams Landing, Victoria to 6.21 per cent in Manunda, North Queensland.

The auction results were as follows: 168 licence place centre in Williams Landing, VIC currently leased to Explorers Early Learning sold for $10,980,000 at a yield of 4.75 per cent 92 place centre in Noble Park, VIC currently leased to Story House Early Learning sold for $6,742,000 at a yield of 4.78 per cent 110 license place centre in Truganina, VIC currently leased to One Early Learning Education Group sold for $6,000,000 at a yield of 4.91 per cent 72 licence place centre in Balcatta (Perth), WA currently leased to Nido Early School sold for $4,325,000 at a yield of 4.99 per cent 68 licence place centre in Manunda (Cairns), Qld currently leased to Goodstart Early Learning sold for $2,510,000 at a yield of 6.21 per cent

“Of particular note in this auction was the number of centres in the auction that achieved yields in the four per cent range. That is a step change lower compared to previous auctions and a reflection of the degree of momentum embedded in the market right now.” Mr Thomas said.

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