Childcare centre yields continue their march lower at latest Burgess Rawson auction

Published on: 15 December 2020

Burgess Rawson, the early childhood education and care (ECEC) focused real estate agency, has completed its December portfolio auction in which the two early childhood education and care (ECEC) centres offered for sale found buyers, one of which recorded a new low yield for the year of 5.58%.

The agency’s final auction of the year was held at Crown Casino Melbourne with bids also being submitted by phone and online as well as, for the first time, chat platform WeChat.

Commenting on the auction, Burgess Rawson director Adam Thomas said that while it was terrific to return to the Crown after such a long period, it was also really encouraging to see so many investors bidding via phone and online, including interstate and internationally.

“Although COVID-19 appears to be behind us now, our ability to create an auction platform that includes multiple channels through which buyers can bid is testament to our ability to adapt and the commitment of our bidders,” he added.

The results of the auction of ECEC services were as follows:

  • The 142 licensed place centre in Cranbourne West, Victoria, currently leased to Imagine Childcare was sold for $6.91 million, a yield of 5.58%
  • The 71 place centre in Melton, Victoria, currently leased to Mayfield Childcare sold for $2.64 million, a yield of 5.87%

The Cranbourne West centre currently leased to private operator Imagine Childcare achieved the lowest yield at a Portfolio Auction in 2020, beating its nearest rival, an Altona Meadows centre sold in the October auction, by 9 basis points.

It was also the highest value property sold this year at $6.91 million.

“After a year that had been disrupted so severely by COVID-19, we were very pleased with the final yields achieved today. Demand for childcare assets continues to build momentum, and we anticipate more of the same next year,” Mr Thomas said.

Burgess Rawson have confirmed their next Portfolio Auction will take place on 24 February 2021 at Crown Casino in Melbourne.

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