This article is from the Australian Property Journal archive
IN Melbourne’s first aged care lease of 2023, Well Health Care (WHC) has committed to a freshly refurbished facility in Springvale South.
Located at 472-476 Springvale Road, the facility was leased at an initial rent of circa $350,000 per annum, reflecting around $8,400 per bed, with 3.5% annual increases.
Jimmy Tat, Sandro Peluso and Marcello Caspani-Muto from CBRE’s Australian healthcare & social infrastructure negotiated the 20-year deal.
The property previously operated as an aged carer centre until 2021, before it was sold in 2022 by Mercy Health.
The CBRE team has since been advising the new owners on the refurbishment program to capitalise on the site’s location and rare “ready for immediate use” status.
“As construction costs and land prices continues to increase due to economic constraints, tenants are seeing added value in opportunities where existing facilities are available for immediate use,” said Tat.
Peluso also noted that the Springvale area’s population growth is set to make it increasingly challenging to secure development sites, making existing facilities all the more appealing.
“Feedback we received from operators during this campaign was that some form of capital injection to improve a facility or bring it up to modern building standards was very likely to increase the rental that could be achieved and give a prospective tenants confidence in committing to a longer lease term,” concluded Peluso.
The deal comes a week after the latest Budget, which supports greater wage equality in the aged care sector through measures such as providing $11.3 billion to support a wage increase for many aged care workers.
