Early eduction asset sold 4.89% Burgess Rawson

Burgess Rawson’s Michael Vanstone has sold a premium early education asset in Alexandria for a substantial $8.5 million.

Mr Vanstone said the Story House asset secured a solid yield of 4.89 per cent, reinforcing the strength and desirability of the early education sector.

Mr Vanstone commented on the enduring appeal of early education assets, stating, “Early education has consistently proven to be one of the strongest performing and most sought-after assets, and this trend is set to continue.’

His optimistic outlook extends to the current year, as he noted, “The year 2024 has kicked off with a bang, marked by strong results and increased enquiries. Positive economic indicators, including a significant reduction in inflation and the anticipated pause on interest rate hikes, create a sound foundation for the months ahead.’

Located at 4B Huntley Street, Alexandria, the property underwent a successful Expressions of Interest campaign.

Its key features include a 15 year net lease to 2034, with 10 + 10 year options stretching to 2054. The tenant, Story House, stands as a leading national education provider, boasting a network of over 50 centres. The net annual rental is $415,415 per annum with compounding 4% annual rent increases.

Situated within a vibrant commercial precinct, the property comprises a 90 Long Day Care (LDC) place centre encompassing an impressive total land area of 2,387sqm.

Mr Vanstone said investors are lured to NSW as the state offers Land Tax-free benefits.

“The early education sector continues to be recognised as an essential service and one of Australia’s most sought-after asset classes. Unprecedented support from both Federal and State Governments is evident, with a projected $10.7 billion in funding for the 2022-2023 period.

“An additional $4.7 billion is dedicated to the Cheaper Child Care Reform, enhancing affordability for approximately 1.2 million families, effective since July 2023.’

Our offices