This article is from the Australian Property Journal archive
IT was a busy month for agents Stonebridge, which managed $93.6 million in sales over August, led by the $12.2 million sale of a 120-place childcare centre at a 4.97% yield in Sydney’s north-west growth corridor.
Stonebridge announced the sale of 14 freestanding investments as part of their August portfolio, spread across top performing segments including fast food, childcare, fuel & convenience retail, and supermarkets.
The top result was a childcare on a 2,303sqm corner site at 186 Old Pitt Town Road, Box Hill secured by secured by a 15-year lease to 2038, to premium local operator, Young Academics.
While in Melbourne, a pub sold for $10.7 million to a private investor on a 4.4% yield. Fargo & Co on Swan Street in Richmond is supported by a 10-year lease to AVC.
“The Fargo & Co. deal highlights the resilient nature of prominent pub tenanted investment and rivals yields paid during the bottom of the interest rate cycle three years ago,” said Rorey James, partner at Stonebridge.
Stonebridge’s August National Portfolio Auction campaigns included six assets and achieved a strong 84% clearance rate, again led by fast food and childcare investments.
“We have witnessed a genuine resurgence across the freestanding market in the last 6-8 weeks, evidenced by a marked 25% increase of enquiry levels and supported by a raft of exceptional sale results, particularly across the ever-popular childcare sector whereby seven offerings within the portfolio are sold or under contract, at pricing levels from $2 million up to circa $19 million,” said Tom Moreland, partner at Stonebridge.
Reflecting the high demand for childcare assets, Charter Hall Social Infrastructure REIT has also recently successfully sold three centres across NSW and South Australia for a combined $27.9 million.
KFC Glen Innes received 45 bids before being sold to a Brisbane-based private investor at a 4.07% yield, for a $930,000 capital value. While KFC Grafton is under contract to an interstate investor, with the result yet to be announced.
Two assets offered on behalf of EG Group, with 15 year lease-back arrangements, resulting in a combined $13 million result from the portfolio sale.
In Queensland, multiple childcare assets were exchanged, including the 75-place centre in Ferny Grove leased to national operator, Sparrow Early Learning, to $6.29 million at a 5.48% yield.
While on the Gold Coast, three further transactions included Goodstart Pimpama, Goodstart Mudgeeraba and Reedy Creek Childcare Centre.
“High net worth private investors continue to return to the market with earnest, given improvements in sentiment and the beginning of interest rate reductions across global economies including the US, with some Australian banks already now pricing in fixed rate reductions,” said Michael Collins, partner at Stonebridge.
“We expect transaction volumes to increase throughout the balance of 2024 and likelihood of yield compression in the short to medium term as investors return to the market.
