CBRE sets national record with Artarmon childcare centre sale
CBRE has sold an Artarmon childcare centre for a record $21 million – representing the largest sale of a single tenanted childcare investment nationally.
30 Apr 2018
The three-storey childcare centre at 6 Clarendon Street sold through CBRE’s Sydney North Shore metropolitan investment specialists Toby Silk, Aaron Arias and Nick Heaton, with the result returning a sharp yield of 6%.
Mr Silk said the sale indicated the strength of the childcare investment market, which has recently been perceived as oversaturated.
“At the tail end of 2017, childcare investments took somewhat of a blow in the market – largely due to oversupply and availability of education and child care permitted sites. However, in suburban areas such as the north shore, that are popular with young families and typically have higher median household incomes, the requirement for private childcare centres remains strong and this is boosting investment in the sector,” Mr Silk said.
“Artarmon is a well-performing growth suburb, and its thriving commercial precinct provides an overwhelming demand for childcare services. The campaign generated 187 enquiries, with buyers drawn to the security of the investment, underpinned by its national tenant and strong future prospects.”
The 3,221sqm property is leased to Affinity Education Group, with the group recently taking a new triple net 10-year lease plus options until 2052. It offers 47 secure carparking spaces across two levels and approval for 210 childcare places.
Mr Arias added the announcement of lifts to the childcare capped benefit scheme by the Federal Government, which are expected in July, had ignited interest in the sector.
“It seems the removal of the benefit cap is making ripples nationally, and particularly in the northern Sydney market. The threshold lift is encouraging consumer uptake of childcare services, and as a result we’ve noticed confidence being restored in the sector as a robust investment choice.”
Over the past 12 months CBRE's NSW Metropolitan Investments team has transacted nine childcare centres for an average sale price of $9.63 million and an average yield of 5.08%.
Mr Arias noted the sales in NSW are in addition to benchmark childcare sales recently achieved by CBRE in Victoria and Queensland.
“Recent sales include the Nino Early Learning Adventures centre in Malvern East which sold for $16.9 million - representing the largest sale in Victoria and the tightest yield achieved nationally at 4.2 per cent,”
“Additionally, the portfolio sale of nine centres in Brisbane to ASX-listed Folkestone Education Trust (FET) for a total of $63 million. This included the sale of 65 Roseneath Drive, Parkinson, which sold for $12 million - representing the highest price paid for a childcare centre in Queensland.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at https://www.cbre.com.