Childcare centre sells for $3.99m in 'popping' North Parramatta
A North Parramatta childcare centre has sold for a whisker under $4 million, signalling the ongoing strength of 2016’s hottest asset class and the results of gentrification in Sydney’s western suburbs.
The 60-place childcare centre sold under the hammer at Burgess Rawson’s biggest Sydney portfolio auction so far this year, joining a trio of service stations as one of the best sale prices on the day.
“Parramatta, in my mind, is the most exciting area of real estate in the country. It is booming and all eyes of government are focused on this area,” said auctioneer David Scholes, introducing the North Parramatta property just moments after selling a childcare centre in Engadine for $2,065,000.
Bidding for the Montessori Academy-operated centre opened at $3 million, initially moving in $100,000 increments.
From $3.5 million bidding then turned to $50,000 increments.
At $3.96 million, and with two bidders left in the race, Mr Scholes confirmed the property would be sold on the day.
After two more bids, the eventual buyer won out with a final bid of $3.99 million.
Sold to a Sydney-based investor with an existing portfolio, who wished to remain anonymous, the centre is currently leased by Montessori Academy on a 10-year lease from 2014, with options to 2044.
Burgess Rawson’s childcare specialist Michael Vanstone said that a variety of factors contributed to the result.
“It represents that the North Parramatta market is popping. Population growth and gentrification have driven a lot of that. Also, Montessori is a great brand that attracts a lot of attention,” Mr Vanstone said.
Three of the five childcare centres listed for the day were passed in, with Burgess Rawson expecting to achieve a sale with interested parties on the day. Despite this Mr Vanstone maintained that they’re still one of the hottest asset classes around.
“The childcare market is still very strong. The yields we are seeing are still showing positive signs for the medium to long term,” he said.
The North Parramatta buyer didn’t buy through an self-managed super fund, a trend common among higher-value centres, Mr Vanstone said.
Petrol stations in Sydney’s suburbs and surrounding areas pipped the North Parramatta childcare centre for best result on the day.
A United Petroleum site in North Richmond, in Sydney, achieved the best result at $5.52 million.
A United Petroleum in Rydalmere, in Sydney, sold for $5 million and a Metro Petroleum site in Habefield sold for $4.8 million.
Results
Sold:$5 million
The United petrol station in Rydalmere is the first listing of the day. Photo: Supplied
Sold: $5.52 million
Sold: $4.8 million
Passed in
The Shell/Coles service station in Blaxland. Photo: Supplied
Passed in
Sold: $2.62 million
Sold: $1.54 million
Sold: $965,000
Sold: $885,000
ANZ-tenanted bank building in Narrabri. Photo: Supplied
Sold: $1,085,000
Sold: $1.39 million
Passed in
Sold: $7.8 million
Three big-name tenancies make up this retail asset in Wagga Wagga. Photo: Supplied
Passed in
Passed in
Passed in
Passed in
Sold: $2.655 million
Supercheap Auto in Muswellbrook. Photo: Supplied
Sold: $1.1 million
Sold: $910,000
Sold: $900,000
Sold: $1.1 million
Passed in
Passed in
Passed in
Sold: $2.065 million
Outdoor recreation area at Engadine Childcare. Photo: Supplied
Passed in
passed in
Sold: $3.99 million
Passed in
Aerial shot of G8 Education leased Katoomba childcare centre. Photo: Supplied
Passed in
