Charter Hall flips childcare centre on sub 5pc yield
Charter Hall is banking a higher than expected price for a suburban Melbourne childcare centre.
Licensed for 140, a local private investor is paying $16.5 million – a 4.99 per cent yield – for 409-411 South Road, Brighton East.
A return of c5.5pc was expected – a price closer to $15m.
The deal comes nine months since a modern, 171-place complex in neighbouring Brighton traded for $17.5m – a 5.19pc yield.
CBRE’s Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat brokered both deals.
409-411 South Road
Developed on part of a supersite over 10 years ago earmarked for a mixed-use village with high rise apartments, 409-411 South Rd holds significant development upside.
Covering 1887 square metres, up to eight floors would be allowed (story continues below).
The tenant, Only About Children, is on an initial lease expiring in 2037 with two 10 year options.
The sale is the latest example of a private investor outmuscling institutional or syndicated capital for an asset of this type, according to Mr Caspani-Muto.
“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,” he added.
“However…in this instance we had numerous private buyers, both local and international, competing,” according to the executive.
“These buyers offered unconditional terms and highly competitive capitalisation rates.
“Understanding critical industry levers and being able to install more investor confidence in the childcare sector is key in achieving true market success”.
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