This article is from the Australian Property Journal archive
APPETITE for childcare centres remains unabated with a Brighton East facility in Melbourne’s bayside suburb selling $16.50 million on a yield of 4.9%.
The 409-411 South Road, Brighton East property was sold by CBRE’s Australian Healthcare and Social Infrastructure’ team including Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat.
The centre was constructed in 2017 and features annual income of $823,107 long-term lease to Only About Children who were recently acquired by US listed Bright Horizons.
Marcello Caspani-Muto said the gap between private and institutional or syndicated capital continues to close.
“With greater certainty of future economic conditions and a desire to grow assets under management we will see these buyers become more competitive in 2025 once again. However, this being said in this instance we had numerous private buyers – both local and international competing for the property. These buyers offered unconditional terms and highly competitive cap rates.
“Understanding critical industry levers and being able to install more investor confidence in the childcare sector is key in achieving true market success,” he added.
Tat said the market continues to see a return of Asian capital.
“We are seeing this across the country but most importantly, these levels are equally elevated in Victoria despite implantation of foreign owners surcharge and the CIPT changes. Given the forecast growth in Vic buyers are looking beyond some of these costs as they feel the capital growth potential is likely to outstrip these holding costs and their buying opportunity is beginning to close as larger scale capital looks to re-enter the buy side of the market.
“Of all the teams transactions this year, circa 40% have sold to international buyers, be it locally or internationally based,” said Tat.
CBRE’s recent sales
| Address | Sale Price | Year | Yield |
| 15-19 Parraween Street, Cremorne | $18,500,000 | 2024 | 4.69% |
| 46 Dendy Street, Brighton | $17,500,000 | 2024 | 5.19% |
| 86 Springvale Road, Nunawading | $12,800,000 | 2024 | 5.23% |
| 117A Kooyong Road, Armadale | $20,500,000 | 2023 | 4.64% |
Demand for childcare facilities continue to go from strength to strength across the country.
Last week a portfolio of three facilities in Victoria sold for $35 million. Headlining the trio of assets that sold through Stonebridge Property Group’s portfolio was a Doncaster childcare centre in Melbourne’s eastern suburbs that fetched $15.5 million on a yield of 6.5%.
Meanwhile childcare centres headlined the sales at a recent portfolio auction.
A Colliers report found confidence in the childcare market is lifting amongst a wide range of investors, after various challenges to the sector since the onset of the pandemic.
