Adelaide childcare centre sells for just over $6m

29 November 2022

A Childcare centre in a coastal southern Adelaide suburb has sold for $6.01 million.

The property at 601-607 Brighton Road in Seacliff has a 15-year net lease to G8 Education, Australia’s largest listed childcare provider, running until 2032, with four further five-year options.

It consists of a large ‘as new’ purpose-built centre licensed for 84 places on a 2,161sq m main road site, with a net income of $319,678 per annum plus GST, with annual CPI plus one per cent reviews.

The childcare centre has five educational rooms with direct access to external play areas, as well as 22 car parks.

It was purchased by a private Melbourne-based interstate investor following a sales campaign run by Oliver Totani and Jack Dyson of Knight Frank and Adam Thomas and Natalie Couper of Burgess Rawson.

Mr Totani said the property was in a great location, with exposure to 40,000-plus passing vehicles daily.

“It is situated in a significant schooling precinct and is in a city bound position only 850 metres from Brighton Central Shopping Centre, as well as being within close proximity to Westfield Marion, the largest shopping centre in South Australia.

“The strong sales result for the property reaffirms A-grade childcare centres are still on the agenda for astute investors.

“South Australia continues to see strong demand for quality investment stock, with enquiry coming from across the country.

“With much uncertainty as to the topping out of interest rates, investors are keen to find certainty across covenant, tenure and income growth, and this G8 centre met all these key criteria and more.”

Mr Dyson said essential service assets were holding their value and continued to be in strong demand in the current market.

“Childcare investments are an excellent ‘defensive’ option, being less affected by economic cycles than other property sectors and cannot be replicated or replaced by internet outsourcing,” he said.

“They have strong underlying fundamentals and are prominently located and supported

by complementary infrastructure, such as schools, non-discretionary retail, community services and transport links. “Changes to the Federal Government Child Care Subsidy, with many families set to receive a higher subsidy, has led to even more demand for these types of assets from investors.”