New government support to continue to drive childcare

The latest round of government support for Australia’s childcare industry is another shot in the arm for the commercial property sector, an agency says.

Childcare has received heavy Federal Government support since the onset of COVID-19, with the government funding free childcare for families during the virus’ first wave.

While parents across Victoria initially feared their access to childcare would be cut under new Stage 4 restrictions in Melbourne, support was extended late last week, with families offered an additional 30 days of government-funded absences to allow parents to stay at home.

Childcare property specialists Burgess Rawson say the funding is further evidence that childcare will continue to receive strong support and 

“We applaud the Government’s responsiveness, providing certainty for both providers and families,” agent Adam Thomas says.

“As we saw with the first round of restrictions, childcare is a priority sector for all levels of government and one of the first to receive assistance.”

A childcare centre at Wangaratta is currently on the market.

“In particular, the Government understands that a robust early learning sector will assist with our economic recovery, allowing parents to return to work as soon as possible.”

The agency, which recently surpassed $1 billion in childcare centre sales, having sold 328 freehold centres, points out that while other asset classes are facing ongoing challenges in the COVID-19 environment, childcare and early learning centres continue to be  sought-after.

Thomas says childcare yields have remained firm.

“As an example, our sale of Bluebird Education in Cranbourne East in October 2019, and the sale of Sparrow Early Learning in Tarneit in March 2020 can be directly compared to recent sales,” he says. 

“In June, we managed the sale of Wallaby Childcare in Epping and Imagine Childcare in Werribee. The location, licensed places, price per place and tenure are all comparable. The respective yields were Cranbourne 5.98%, Tarneit 5.80%, Werribee 5.86% and Epping 5.99%.”

“What does this show for commercial property? It reiterates that the fundamentals of commercial property are stable.” 

Burgess Rawson currently has a number of childcare centres for sale through expressions of interest and private treaty, including ones at Werribee and Wangaratta in Victoria, Singleton in NSW,