A pair of childcare centres in Sydney’s north and north-west promising significant long-term growth are to be auctioned this month as an industry-wide boom continues.
The centres at Turramurra and Pitt Town have come to market as buyers rush to secure investments in the sector due to their ongoing Federal Government funding and demand as an essential service.
The buyer of the Pitt Town property is set to benefit from major growth in Sydney’s northwest region with new infrastructure including the Metro rail link and the suburb’s population growing at four times the Sydney average.
Leased to national provider Affinity Education, which operates more than 150 centres, the property at 2-6 Quarry Street features a stunning 130-place, purpose-built facility just metres from Pitt Town Public School and surrounded by new and future housing development.
Secured on a 10-year net lease with options to 2047, the centre returns a net annual income of $440,478 plus GST, with attractive 3.5% per annum rent increases and landlord-friendly lease terms requiring the tenant to pay outgoings including management fees.
Burgess Rawson childcare specialist Michael Vanstone said Pitt Town was ripe for investment.
“Pitt Town is positioned in the booming northwest growth corridor and is a location suited to young families seeking a lifestyle on larger residential blocks within one hour of Sydney,” Mr Vanstone said.
The Turramurra centre is positioned in a sought-after location on Sydney’s upper North Shore, on a strategic 1078sqm landholding in a well-established residential area.
With proximity to schools considered childcare’s lifeblood, the site at 49-51 Boomerang Street is almost unmatched, with Pymble Public School within walking distance and 17 primary schools within a five- minute drive.
Benefiting from a 15-year lease to 2034 to respected boutique operator Handprints Early Learning, plus options to 2054, the near-new centre currently returns $264,000 plus GST in annual net rent. With 3% annual increases built into the lease, rent is expected to rise by more than $100,000 over the next 12 years, reaching $376,400 by 2033.
Mr Vanstone said established childcare centres continued to rank among the best and most popular commercial properties for investment, due to their prime locations and significant government support.
“This is a prestigious North Shore childcare investment leased to a leading operator focused on delivering quality childcare to the discerning professional local demographic,” he said.
“Childcare investors see value in parking funds in investments which provide an essential service like childcare, with the sector receiving a recent boost in Federal Government funding, matched with a relaxation of the assistance eligibility requirements, making it more accessible to all families.”
Burgess Rawson’s Sydney Investment Portfolio Auction will be held from 11am AEST on Thursday, September 30, with bidding available via phone or online.