Home Consortium pays $13m for a Busy bees childcare centre in Woolloongabba in landmark deal

There is a multimillion dollar scramble for childcare centres, with one property recently setting a Queensland sales record.

Queensland recorded its largest ever childcare centre transaction as investors fight for a foothold in the sector.

National property and investment group Home Consortium paid $13m for Busy Bees childcare centre at Woolloongabba.

The deal included a gym tenant and the deal realised a yield of 5.5 per cent.

Cushman & Wakefield’s Michael Collins, who struck the deal with Tom Moreland and Aaron Dahl, have completed seven childcare centre deals in Queensland since the start of the year worth just over $50m either through an auction campaign or private sales.

Busy Bees at 201 Logan Rd, Woolloongabba which was bought by Home Consortium for $13m.

“It’s been unbelievable. It’s the strongest market I have ever seen in childcare and I have been in that market for 11 years,” he said.

“We expect this pent-up demand to continue for the foreseeable future, as the Reserve Banks‘ lower for longer interest rate environment is encouraging investors, both large and small, to pay premium yields for what are considered to be long term, recession and now pandemic proof investments.

“We’ve seen yields drop up to 100 basis points since October last year and they will continue to tighten further as interest rates remain low.”

Cushman & Wakefield’s Michael Collins and Tom Moreland.

Mr Collins said while Busy Bees — which said was the Queensland’s largest freehold childcare transaction on record — was sold to a fund manager, the other six childcare centres were sold to high net worth individuals.

These were: Kids Early Learning — Taigum, $8.310m (5.79pc yield); Imagine Childcare — Rochedale, $5.55m, (5.56pc); Harmony Early Learning — Springfield, $7.4m, (5.77pc); Amity Road Early Learning — Coomera, $6.309m, 5.48pc); Play & Learn Childcare — Thornlands, $5.12m, (5.5pc); and Lead Childcare Centre — Toowoomba, $4.525m (7.17pc).

Mr Moreland said there was increased demand from high net worth and institutional investors seeking greater exposure to the sector.

“During the height of the Covid-19 pandemic, the Australian Government declared childcare an essential service, bolstering the sector with a $2.6bn response package,” he said.

“This unwavering support for the sector, coupled with attractive and secure long term lease fundamentals is driving yield compression for the assets on a national basis.”