Childcare Investment | $6,800,000 | Net Yield: 5.90% | QLD

This exceptional childcare investment opportunity represents the calibre of high-value, income-producing assets Rethink Investing continues to secure on behalf of clients seeking substantial growth potential within the childcare sector.

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Positioned on a premium 6,087 square metre corner site in Wilsonton, Toowoomba, the purpose-built facility is operated by Leading Child Care Pty Ltd trading as LEAD Childcare, a successful and experienced private operator with 16+ centres throughout Queensland demonstrating significant operational expertise and financial stability.

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The property benefits from a secure 15-year triple net lease extending to 2034, with two further 5-year options taking potential tenure through to 2044. Under this truly passive investment structure, the tenant is responsible for 100% of all outgoings including structural repairs and maintenance, land tax, and management fees, delivering exceptional security for the incoming purchaser.

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The centre is licensed for 205 LDC places at a rent of $1,955 per place, generating a net income of $400,956 per annum plus GST. However, comprehensive market analysis reveals the property is significantly under-rented, with comparable facilities across Queensland achieving rental rates between $3,350 and $3,800 per place.

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At a conservative market rate of $3,000 per place, the net rent would increase to approximately $615,000, representing a net yield of 9% based on the current purchase price. Using a market capitalisation rate of 6%, this translates to a potential capital uplift of approximately $3.45 million, highlighting a compelling value-add opportunity for astute investors.

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Investor security is enhanced through excellent lease provisions including a 6-month bank guarantee plus personal guarantees from Michael and Nina Hefford, alongside a ratchet clause ensuring rent cannot decrease at market review. Annual rent reviews deliver the greater of CPI or 3%, with a market review at Year 11 (2030) and upon commencement of each option term, providing robust income growth mechanisms throughout the lease tenure.

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The site's strategic location offers frontage to the Warrego Highway with approximately 17,226 vehicles passing daily, whilst being positioned within 100 metres of a primary school and 3 kilometres of 3,924+ students, supporting ongoing demand for quality childcare services within the area.

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The property is improved by three dwellings and includes 39 car parks, with the tenant currently organising for astro turf replacement in centres 2 and 3, demonstrating their long-term commitment to the location and ongoing investment in the facility's presentation and functionality.

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With a purchase price of $6,800,000 and total cash required of $2,894,225 (including 35% deposit and purchasing costs), the investment delivers a net annual cash flow return of $400,956 and a return on equity of 3.93% in pure cash flow terms. When accounting for conservative capital growth of 5%, 7% and 10%, the return on equity increases to 15.67%, 20.37% and 27.42% respectively, demonstrating compelling returns for long-term wealth creation.

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With secure triple net income, substantial rental upside potential, strong covenant protection and strategic positioning within Toowoomba's family-oriented demographic corridor, this acquisition reflects the calibre of childcare assets with genuine value-creation opportunities that Rethink Investing continues to secure for clients.

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‍About Rethink Investing

• Australia & New Zealand's largest and most experienced commercial buyer's agency
• $7 billion+ in commercial property secured for clients
• Exclusive access to 70% off-market opportunities
• Specialists in high-yielding commercial property investments

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Secure your next high-performing childcare asset with our expert team.