Childcare & Swim School Portfolio Sells for Circa $19m, Record Yield Struck for Swim School

A portfolio of childcare and swim school assets has traded hands for close to $19m, with each asset selling individually following an international expression of interest campaign handled by Stonebridge.

The portfolio comprised 2 Early Learning Centres leased to ‘The Y’, formerly known as YMCA; and a ‘Kingswim’ swim school, located in Clyde North and Tarneit, Victoria.

Demand continues to grow in the sector, with the Kingswim asset selling for the sharpest yield recorded for a swim school in Victoria at 5.8%*. The childcare assets averaged yields well below 5%*, with the portfolio averaging 5.1%* across the 3 assets including the swim school.

Buyers from Tasmania, Sydney, Perth and Melbourne together with several overseas groups competed for the portfolio, attracted to the long term leases, tenant profile and the vast amount of government funding in the sector, expected to total more than $10 billion in 2020/21, said Stonebridge’s Rorey James, who handled the portfolio with colleagues Kevin Tong and Justin Dowers.

The government’s recent announcement of a $2.6 billion* ‘COVID-19 Response Package – childcare’ funding package to support the continued viability of the sector was welcome news to the sector.

Kevin Tong’s, head of Stonebridge’s Asia Practice arm, commented that there was a “sheer weight of aggressive capital continuing to seek leased passive investments, regardless of asset class.” Adding that there were traditional supermarket and shopping centre investors among those participating in the YMCA portfolio.

Stonebridge has recently been appointed on 2 other Childcare investments, located in Wantirna and Laverton, with a third listed off market in Tarneit which will be sold off the plan with a brand new 15 year lease in place.


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