NEED FOR HOMEWORK ON CHILDCARE CENTRES
Plenty of centres have hit the market but the sector remains a desirable one – so long as investors do their due diligence before jumping in
A RUSH of childcare centres being built or hitting the market hasn’t taken the shine off the asset class, but investors are taking a closer look before buying, property experts say.
Childcare centres under construction, or on the market, include Bluebay Childcare Centre, at 95 Brisbane Rd, Biggera Waters, another at 165-171 Beaudesert Nerang Rd, Nerang, to be leased to Imagine Education Group, and a vacant centre opposite Gold Coast University Hospital at 5 Tonga Place, Parkwood.
Knight Frank Gold Coast joint managing director Mark Witheriff said there was no question buyers looking for childcare centres had a lot of choice.
“There are a lot on the market (but) that is because there is such strong population growth on the Gold Coast,” he said.
“If you go back 12 or 18 months ago, you would put a childcare centre on the market and buyers would fight over it because they were viewed as low risk.”
He said that situation had changed due to an oversupply in certain areas.
“The asset class is fine, childcare centres are still attractive, but in areas of oversupply investors are becoming more picky about what they buy,” he said. “The level of due diligence has become greater.”
Mr Witheriff said buyers were taking a long-term view when acquiring childcare centres.
“They want to know if the occupancy rate is sustainable.”
CBRE associate director Tom O’Driscoll said childcare centres were underpinned by strong Federal Government funding, which was very attractive to investors.
“At the end of the day 45 per cent of funding comes from the Federal Government,” he said.
He said funding had recently been extended so childcare was affordable to lower socio-economic families.
CBRE Gold Coast managing director Jonathan O’Brien said marketing a childcare centre was no different to any other property, with “position, position, position” still of the utmost importance.
“In the areas where there is an oversupply, they are being priced accordingly,” he said. “However, they are still an attractive asset.”
Ray White Surfers Paradise commercial sales agent Adam Young is marketing the vacant childcare centre at 5 Tonga Place. He said the marketing campaign was a result of Goodstart Early Learning centres amalgamating its operations in the area, and deciding not to renew the lease at Tonga Place.