Arena lists childcare centre leased to 2055
Arena REIT has listed one of the most secure investments on its books – a Melbourne childcare centre with an initial lease expiring 2055.
The ASX-listed essential services focused investment house can expect over $10 million for the Mayfield Early Learning complex at 1A Bernard Street, at the north east corner of Chesterfield Road, also a T-intersection with Turner.
With 120 places, it returns annual rent of $610,000 ex-GST with fixed annual rent rises linked to CPI or 2.5pc.
The lease is triple net; the occupier pays in this instance, maintenance, CAPEX and land tax. It also picks up outgoings.
Arena holds several childcare centres with this length rental agreement.
The listing comes seven months since Charter Hall sold a 140-place Brighton East childcare centre for $16.5m – a 4.99 per cent yield.
Also late last year, ex-Patrick Corporation co-owner Peter Scanlon banked $15.5m for a 158-place asset of this type in Doncaster, and $12m for a 139-place complex at Heathmont.
Lengthy lease
The renovated Cheltenham building, including a historic weatherboard component, containing 800 sqm and on a quarter of a hectare with 22 car parks, has operated as a childcare centre decades.
Mayfield moved in five years ago. With a 10 year option, it can stay until 2065.
“An initial lease term of 35 years is almost double the longest initial leases usually seen in the market,” CBRE’s Marcello Caspani-Muto, who is representing Arena with Sandro Peluso and Jimmy Tat, added. “This is a truly hands-off holding with notable exposure and access from three streets…the long-term land value and alternative use projects are significant are significant”.
Cheltenham is about 18 kilometres south of the CBD.
Subscribe to our newsletter at the bottom of this page.
