GOODWIN Mitchell O’Hehir & Associates has a problem. The West Perth-based firm’s accountancy broker, Garry Manners, has 10 buyers looking for metropolitan practices, but has only one firm in the south-western suburbs to offer them.
GOODWIN Mitchell O’Hehir & Associates has a problem.
The West Perth-based firm’s accountancy broker, Garry Manners, has 10 buyers looking for metropolitan practices, but has only one firm in the south-western suburbs to offer them.
This ‘problem’ will be highlighted in GMO’s forthcoming ‘state of the market’ annual business review, which covers more than 50 categories of small- and medium-sized enterprises operating in Western Australia.
GMO’s analysis, which echoes the results of recent surveys showing an increasing number of SME business owners optimistic about the outlook for 2010, found significant growth and interest in IT businesses, while questions remain over the value of financial planners and mortgage brokers.
The review found that buyer demand remains strong for accounting practices, caravan parks, and motels, while there is weak demand for small fruit and vegetable businesses, fine-dining restaurants, newspaper delivery rounds and general retail outlets.
The typical sale prices for accountancy practices, caravan parks or IT companies is up to $1 million, although small fruit and vegetable businesses, newspaper rounds and general retail stores can generally be bought for several hundred thousand dollars.
GMO managing director Graham O’Hehir said the review indicated that childcare centre values appear to have weathered the storm of the ABC Learning collapse without any apparent drop in buyer demand or effective prices.
GMO calculates the typical cost of a childcare centre in Perth to be around $1 million.
“We suspect that with non-profit organisations such as Mission Australia taking so many ABC centres out of play, there is still unmet buyer demand,” Mr O’Hehir said.
“We are also of the opinion that, as metropolitan land prices continue to surge, it is becoming increasingly difficult to find start-up sites, which should mean incumbents will see their businesses and their freeholds in continuing strong demand.”
Ric Ainley, director of business at Perth-based broking firm Rayner (WA), which focuses exclusively on childcare centres, said interest in the sector would remain strong because it was government supported.
“There is a good demand for childcare centres at the moment, provided information about their operations is well-documented,” he said.
“Demand is still robust, but people are still somewhat apprehensive as a result of the fallout with ABC Learning centres.”
Newsagency & General Business Brokers executive director Neville Roediger said the drop in demand for newspaper distribution rounds was a symptom of low unemployment, as the job typically had long and “unsociable” hours.
“But we seem to be coming out of the trough and there are now signs of life,” he said.
