Coveted child care centre to test the market in Sydney

24 November 2021

Child care centre First Grammar Baulkham Hills has come to market, as favourable demographics and increasing utilisation rates continue to stimulate investor appetite for metropolitan assets.

JLL’s Capital Markets (NSW) Directors, Gordon McFadyen & Dylan McEvoy have been appointed to sell at 24 Witonga Crescent, Baulkham Hills via a Public Auction campaign.

First Grammar Baulkham Hills is currently operated and leased by G8 Education; Australia’s largest ASX-listed child care provider, with more than 470 centres across Australia. The purpose built 39 place child care asset has a secure 15-year lease term expiring in 2025, with a further five year option to 2030.

Nationally, more than $1.8 billion of child care assets have transacted since 2015, with 2021 year-to-date (YTD) market sales volumes rebounding to already surpass total sales volumes for 2020. JLL data shows that across the market, more than $220 million of assets exchanged over the six months to 30 June 2021.

Mr McFadyen said, “2021 has shown very high levels of demand in child care assets, with strong investment being witnessed in terms of both sales volumes and yield compression. The sector is very resilient and has become a highly desirable asset class as investors pursue secure, long leased assets to quality tenant covenants.”

The NSW market has dealt with supply concerns in recent years, with the lowest ratio of population aged 0-4 compared to the number of assets. The continued demand for services has been reflected by increased pricing across certain metropolitan areas.

Mr McFadyen said, “Child care centres are a perennially in-demand asset class, which is especially true for centres located in metropolitan areas. We are seeing sustained demand for metropolitan child care centres with approximately 65% of transactions since 2019 occurring in metropolitan locations.

“We anticipate strong investor interest for the First Grammar Baulkham Hills investment due its attractive price point, long term lease and high calibre tenant. The centre has an excellent reputation, healthy waiting list and has been an established childcare destination in Baulkham Hills for more than 15 years. This burgeoning location with strong demographics of families and professionals point towards continuing high demand for childcare services in this location well into the future” said Mr McFadyen.

Baulkham Hills is a high growth area with a high density of young professional families. With an easy commuting distance to Sydney CBD, the precinct is also seeing further growth in local employment hubs, such as the nearby Norwest Business Park.

ABS data shows that at 33%, NSW has the highest percentage of children in childcare, compared to 22% for VIC and 24% for QLD, respectively.