This article is from the Australian Property Journal archive
AGED care operator BlueCross has sold off another facility, netting around $11 million from the divestment of its recently-closed Northcote site in Melbourne’s north.
An investor bought the vacant 2,895 sqm parcel at 14-24 Pearl Street, touted as one of the largest offered in the Northcote and Clifton Hill area, five kilometres from the CBD, in a decade.
The facility has 75 single-bed rooms across three levels and was ravaged by COVID last year before BlueCross made the decision to close the facility in earlier this year, as part of what it said was a consolidation measure.
CBRE’s Marcello Caspani-Muto, Sandro Peluso and Jimmy Tat managed the sales campaign in which 10 offers were received, with three parties invited to compete in the second and final round.
“Pearl Street adds to the list of vacant aged care homes have changed hands in the past 18 months, and their trajectory in the market is only heading north,” Caspani-Muto said.
“Depending on the age, quality and maintenance history, there are opportunities for investors or owner occupiers to secure an asset at below-replacement cost.
“Aged care construction costs are substantial, which creates an incredibly high barrier for developers and investors to enter the sector and means new projects are rarely feasible.”
BlueCross offloaded an empty aged care facility in Ivanhoe earlier in the year for $8.62 million to an offshore private investor, shortly after opening a new larger facility nearby. That had a licence for 51 beds and is on 5,345 sqm of land.
Meanwhile, Japara has sold two facilities across Melbourne over the past 18 months with leaseback agreements. It most recently sold its Capel Sound facility on the Mornington Peninsula for $8.25 million, while last year it fetched $13.3 million for the freehold of its Springvale asset, at the same time as it offloaded a vacant south west Geelong property for $3.6 million.
Peluso said investor groups recognised the full value of Pearl Street, “a blue-chip asset on a significant landholding” just behind High Street, a popular retail thoroughfare and connected to the Melbourne CBD via a tram line.
“We are seeing more and more that astute investors realise that the aged care sector can provide excellent value with multiple options for future development.
“Although many of the alternate uses are highly-specialised, from healthcare or hospital conversions to disability services accommodation, the right groups can realise the true value of these properties.”
