Reply: 1.1.1
From: Kristine .
Glenn
Which State are you looking in? I owned and operated a children's services centre in Victoria for nearly five years, and have observed the changes of owners and operators of the centre since I left.
As in all commercial operations, the strength of the tenant is of vital importance, plus growing or shrinking market / market share etc.
The demographic 'wave' of children under 5 years in the catchment area will be critical. What % of the child place weekly fee does the rental represent? What is the benchmark average for rent paid per child place? Is the Centre accredited, and for how long? Does the centre operator offer casual care to boost income, or do they concentrate on long day care only? What about children under 2? Any nursery facilities? Hours of opening, weekend or evening hours etc
In so far as insurances are concerned, the tenant is responsible for all insurances under a commercial lease, repairs & maintenance etc, but not usually items of a capital nature unless specifically related to the operations of the business. As licensed operators, they will be subject to regular checks and audits from local, State and Commonwealth departments. The kitchen, for example, will have to comply with Health Regulations, and staff working in the kitchen will have had to attend food handling courses. The tenant will have to comply with all this, but you, as owner, will have no direct dealings with the business.
Glenn, a good service provider will be an excellent tenant, and quality centres in Melbourne have shown very good capital growth and are in constant demand as high yielding commercial investments.
You are welcome to email me direct should you wish to go into this in more detail.
Good luck
Kristine