The year’s first Victorian childcare centre sale has taken place – to a China based investor who offered to settle in six days.
The new centre at 17 Station Street, Pakenham, in Melbourne’s outer south-east, traded for $5.02 million following an off-market campaign.
The sale price represents a 6.6 per cent passing yield. The occupant, Aspire Early Education , has rented the property until 2034, when it has options to renew.
Savills Jesse Radisich said that it “is an exceptional sign of confidence and strength in the commercial market”.
Licensed to accommodate 122, Mr Radisich said the deal valued each place at $41,145.
Colleague Benson Zhou added the deal “is an exciting indication that Chinese capital is continuing to seek a home in Melbourne and off-shore demand remains very high”.
“The Savills Melbourne team was able to achieve this extraordinary off-market result leveraging our best in class Asian Services Division. The result was made even more remarkable with the Savills team able to secure a settlement period of just six days”, Mr Radisich said.
Numerous Melbourne childcare centres traded last year – piquing the interest of small investors from here and abroad.
A couple of the investments sold for eight figure sums – including 188 Tucker Road, Bentleigh, which exchanged six months ago for $11.7 million, a deal which reflected a 5.5 per cent passing yield.
In August, a Chinese investor spent $11.3 million for a childcare investment at 31 Nepean Highway, Elsternwick, which was still under construction. On 2186 square metres of land zoned Commercial 1, which would allow for the construction of apartments, this asset traded on a yield of less than 6 per cent.
Late last year, a “state of the art” complex at 189 St Helena Road, Greensborough sold for $7.26 million, while a mixed-use investment anchored by a childcare centre in Doreen sold for $15 million to a Singaporean investor with a local partner.
Childcare centre developers were also buying sites which could make way for new complexes.
In Heathmont, about 24 kilometres east of the CBD, a former church will make way for a childcare centre followings its sale for $3.4 million four months ago.
Closer to town, but also to the east, in Bulleen, a childcare centre is set to replace three residential homes, which were offered as one development site, and acquired for $3.25 million, as we reported in September.
Nearly two years ago, Little Lane Learning outbid residential developers, offering more than $60 million for a prime 9356 sqm site at 68 Buckhurst Street, South Melbourne – another deal negotiated by Savills. This block was offered with a permit to construct four apartment towers containing 1004 flats.