Stunning Sydney childcare centre sells for $11.5 million

A newly completed childcare centre in Sydney’s south-west has sold for $11.5 million reflecting a 5.26 per cent yield highlighting continued investor demand for defensive assets with long-term income security.

The Young Academics Early Learning Centre, located at 120 Lodges Road, Elderslie, was sold through Yosh Mendis and Michael Vanstone of CBRE, with the offshore buyer introduced via Zomart He of CBRE’s Asian Services Desk.

Mr Mendis said the result demonstrated the depth of capital targeting sectors supported by long-term demographic and structural demand.

“The transaction reflects ongoing offshore interest in Australian childcare property, particularly assets with strong fundamentals, secure operators and long weighted average lease expiries,” he said.

“A number of centres have traded in the eight-figure range as domestic and overseas investors seek long-dated, secure income streams,” he said. “Comparable assets of similar scale and WALE are increasingly transacting at eight-figure price points, reflecting investor focus on metropolitan or growth locations, operator strength and net lease structure.”

Mr He commented that this transaction reflects strong ongoing interest from Asian investors in Australia’s childcare sector.

“Childcare is regarded as a defensive asset class known for its resilience, and Australia continues to offer stable investment opportunities supported by strong demographic fundamentals driving long‑term demand. Combined with its land‑tax‑free status in NSW and ongoing bipartisan government support, the childcare sector remains highly attractive to Asian investors.”

“Our team has a strong pool of Asian investors and syndicates actively seeking premium childcare assets across the eastern seaboard. These groups are looking to secure assets either individually or as part of a broader portfolio.”

Completed in 2025, the purpose-built, two-storey facility accommodates 130 licensed places and features modern indoor and outdoor play areas, basement parking and contemporary staff and parent amenities. The centre is leased to Young Academics, an established childcare operator with a substantial network across New South Wales.

The property is underpinned by a 15-year net lease with fixed three per cent annual rent increases, generating a net income of approximately $604,500 per annum, reflecting an initial yield of around 5.26 per cent.

Elderslie sits within the Camden Local Government Area, a family-oriented growth corridor that continues to benefit from strong population growth, rising household formation and improving connectivity to Greater Sydney. The broader Macarthur region has recorded some of the strongest population growth rates in New South Wales, underpinned by a high proportion of young families and expanding residential development.

Mr Vanstone said childcare investment values across Sydney’s growth corridors had strengthened over the past two years.

“Limited supply of newly completed, well-located childcare centres, combined with competitive investor demand, continued to support pricing at the upper end of the market.”

Mr Mendis added that with purpose-built stock remaining scarce and demographic tailwinds firmly in place, high-quality childcare assets were expected to remain tightly held.