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Victorian Childcare Sector Set New Sales Records

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The sale of five of six fully leased Victorian childcare centres for more than $44 million have set new national benchmarks for the sale of individual centres.

The sales were an average of $8.8 million each, and averaged 5.3 per cent yields.

The five centres at Ashwood, Mentone, Blackburn North, Hughesdale, and Carnegie – all in Melbourne’s east, were put to market last month as a whole or individually in the first such sale of its type in the Melbourne market.

The centres came to market as the Federal Government pushed through its $1.6 billion childcare package reforms, providing families with fee relief of up to $3400 a year.

Savills' Julian Heatherich said the properties presented an unprecedented opportunity to take a strong foothold in Australia’s booming child care market.

"This was a brilliantly assembled portfolio combining exceptional landholdings, quality buildings, geographic diversity and a tenancy profile that is rarely available elsewhere in the commercial property market," he said.

"Put this together with built-in rental growth and significant income tax depreciation benefits in a rapidly growing, government backed industry and they represent great value and that was reflected in the results so far."The five centres include:

  • 66-70 High Street Road, Ashwood - 15 year lease at $486,218 pa net – sold $9.1 million on 5.34% yield

  • 105A Kangaroo Road, Hughesdale - 20 year lease at $545,879 pa net– sold $9.75 million on 5.6% yield

  • 103-107 Koonung Road, Blackburn Nth - 20 year lease at $498,015 pa net– sold $9.28 million on 5.37% yield

  • 1 Toolambool Road, Carnegie - 20 year lease at $438,697 pa net– sold $8.2 million on 5.35% yield

  • 37 Venice Street, Mentone - 20 year lease at $367,822 pa net– sold $8 million on 5.44% yield

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Article originally posted at: https://www.theurbandeveloper.com/articles/victorian-childcare-sector-set-new-sales-records