The private education sector is set to become a major player in the property market with Early Childhood Development (ECD) becoming one of the largest potential growth areas believes Greg Dart, director of The High Street Auction Co.
Dart’s assessment is based on the country’s demographic and the fact that youth account for over a third of the overall population. According to Statistics South Africa (Statssa), the number of children under five attending an Early Childhood Development (ECD) centre or pre-school has increased to one in three from one in ten since 2002.
“As we know, the public schooling system has its challenges. Private schools are filling the gaps. People want solutions that talk to their lifestyle needs,” says Dart.
Over the past decade, enrolments in privately owned educational institutions have doubled. In 2024, listed private education companies recorded strong revenues and growing profitability with the likes of Curro and AdvTech posting positive financial results. Key opportunities going forward include tertiary student accommodation and setting up further early childhood development facilities. As more South Africans prepared to invest in their children’s education across various affordability bands, Dart expects an increase not only in demand for functional properties but properties suitable for conversion.
Investing in education
High Street’s latest auction – to be held on March 27 at Bryanston Country Club – is headlined by four education based properties.
Dart says it is very rare for properties like these fully operational and thriving preschools to come on to the market: “This group wishes to liquidate some of the property assets in order to reinvest for growth. With a new three-year lease then to be signed on transfer (sale and leaseback) that provides for a 5% escalation and impressive gross annual incomes, all four represent strong tenant covenants that ensure a steady income stream with great potential for further growth. They are perfect for investors looking to step into the education sector or expand their portfolio.”
All four of the preschool properties coming up for auction are well located in areas where there is strong demand for schooling and the prospect of even further demand as parents prefer to live near their children’s private schools for convenience.
The first property, an easily accessible and well-maintained former residence in the heart of Bryanston, has been expertly converted into a fully operational school. It features 12 spacious classrooms that provide a productive learning environment for up to 57 learners as well as six bathrooms and an expansive playground and gardens.
The second – another well-maintained property in the heart of Buccleuch that has been expertly converted into a fully operational school – has five spacious classrooms for 48 learners, five bathrooms and a safe and enjoyable outdoor area for children to play.
A thriving school in Petervale with six classrooms for 45 learners, four bathrooms and a spacious play area that offers great potential for further growth is the third property to come under the hammer followed by a fourth in Linden with five spacious classrooms and four spacious classrooms for its 35 learners.
Converting and commercial opportunities
Dart is looking forward to a highly successful auction on March 27 with a total of 34 properties.
“It is definitely bigger than our February auction, both in terms of volume of properties and the quantum of value. That said, although February is traditionally a difficult month for the property sector, we achieved registrations on 70% of the stock that we took to market and, of that, we received offers of 82% on those. This illustrates that the auction platform will elicit a high ratio of offers from the market and affords a solid opportunity to see where the market is and assess demand,” he notes.
The March auction includes a number of fully tenanted prime office spaces: “This is a great advantage. You’re purchasing a predictable income stream. Very few people are buying vacant buildings. Everybody is looking for income that is not subject to risk. We’ve got quite a few tenanted commercial office spaces as well as two that are particularly suitable for repurposing and residential conversions,” he adds.
Dart says the conversion market is particularly active at present and a number of conversion companies have already approached High Street ahead of the March auction.
Additional gems
One of the prime commercial spaces that is drawing attention ahead of the March auction is a Waverley commercial development that is part of a liquidation.
“Potential buyers love the address. The space looks down across to the Melrose Arch precinct. It has a good view out onto the M1. With deals like these, location is becoming increasingly important. People are avoiding buying where there are dysfunctional local authorities where service delivery is compromised and infrastructure is failing. You’ve got to have fully operational transport nodes,” Dart points out.
Other fascinating properties that High Street will be selling in March include a coastal airstrip and development sites known as the Andrews Field Airport and private nature reserve situated north of Struisbaai North within the Cape Agulhas municipality and a microbrewery and restaurant in the Hemel & Aarde Village, Hermanus.
“The already positive response that we are getting ahead of this auction shows us that sentiment continues to improve and that there is movement in the market. There are more people coming to our auctions and we are converting interest into transaction and deal flow,” Dart concludes.
