SIT BACK AND ENJOY THE LONG-TERM RETURNS

Published on: 13 October 2020

A Queensland childcare centre offering a gold-plated lease to a major operator has come to market as the industry experiences heated ongoing demand.

The centre, 8km south of Townsville town centre, features a highly sought-after 20-year triple net lease to 2033, with two further five-year options and guaranteed rental growth built into the deal.

The property at 213-217 Stuart Drive is leased to experienced operator Guppy’s Early Learning and features a 590sqm facility, licensed for 74 long day care places on a substantial 2,468sqm corner site.

Under the lease the tenant pays all outgoings, including maintenance, insurances, management fees, rates and land tax, offering a true ‘set and forget’ opportunity for investors.

The agreement also includes minimum 2.5% annual rent increases, with ratchet provisions at market review, ensuring rental returns can never decrease over the life of the lease.

The asset will be auctioned at Burgess Rawson’s upcoming Investment Portfolio Auction on October 28.

Burgess Rawson childcare specialist Adam Thomas said childcare had continued to prosper throughout the COVID-19 pandemic, with heavy Federal Government support underpinning its ongoing growth.

“While on-market volumes have decreased, yields have held firm, demonstrating the significant demand that remains within the market,” Mr Thomas said.

“Childcare was the only sector to receive industry specific funding and support throughout the COVID pandemic, marking it as one of Australia’s most secure asset classes for investment.”

The Wulguru centre currently returns a net income of $148,732 per annum, plus GST.

Mr Thomas said childcare currently represented some of commercial property’s most secure long-term returns.

“For investors seeking entry level assets with triple net leases and zero maintenance, you won’t find better,” he said.

Burgess Rawson’s Investment Portfolio Auction will be held at 11am AEDT on Wednesday, October 28.

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