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Confidence is high in the child care sector as evidenced by Burgess Rawson with almost $20 million worth of childcare centres sold within the first few months of 2017.

During that time, a number of centres in Melbourne and Sydney were put on the block across two days of auctions and all were immediately sold.

The Courier Mail wrote last Friday that, “Brisbane-based development group made a $500,000 plus profit in less than year” for a childcare centre north of Brisbane.

It seems that the childcare industry is growing exponentially, which is good news for those considering investing in the sector.

The profit for the Brisbane-based development group came after investing in its refurbishing, which Childcare Concepts outlines is an important factor to consider.

 

Up Your Centre’s Value

According to Childcare Concepts to get the highest value from your centre, you should firstly aim to best position yourself in the market by increasing your revenues. This could be done by increasing your occupancy or increasing the revenue per child. Secondly, you should aim to reduce your expenses through decreasing credit card fees and non essential expenses. You should then look at what makes your centre unique compared to your competitors and identify if there is any room for improvement, or if you are clearly articulating all your points of difference at all.

 

Added Benefit of Investing in Child Care

Another benefit of investing in childcare centres is that they offer long term leases. As stated by The Courier Mail, the company that went under an “aesthetic” refurbishment, secured Journey Early Learning on a 15-year lease with options and 3% annual rental increase and the sale realised a yield of just over 6%. The rise in sales of the non-core commercial investment asset is certainly achieving tight yields in the metropolitan areas.

A Sydney-based investor paid $1.47 million under the hammer for the Journey Early Learning centres in Caboolture South, Queensland.

According to Burgess Rawson’s auction, a centre in Pakenham, Victoria, leased to Amiga Montessori until December 2031 sold for $5.12 million on a yield of 6.2%.

Getting a professional childcare broker is the way to go as they are equipped with industry knowledge and numerous marketing channels to ensure you attain the best outcome. This way all negotiations are also done in a confidential and professional manner so you can enjoy the benefits of your hard-earned investment.

Thinking of investing in the childcare centre business, and want to know more?

Feel free to contact us at Childcare Concepts. We love to help our clients achieve their investment goals as quickly and smoothly as possible with our wide experience as Australian childcare brokers and consultants.

 

If you found this blog useful, you might also like:

Why You Should Have an Exit Strategy

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