Investors chase growth corridor childcare centre

The two year old Pink Hill Boulevard property earns $411,848 annually.

A third major Melbourne childcare centre has sold in as many weeks on a low yield.

The two year old complex, 2 Pink Hill Boulevard, Beaconsfield, in the heart of a major growth corridor, fetched $8 million – a 5.05 per cent return – last month.

The Beaconsfield site, 47 kilometres south east of Melbourne.

Explorers Early Learning is the occupier on an initial lease expiring in 2036 – or 2066 with options.

With seven rooms and a kitchen, it contains 790 square metres.

On 2448 sqm also fronting O’Neil Road and the Princes Highway, with 28 car parks, the venue is licensed for 130 children.

CBRE Healthcare and Social Infrastructure’s Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat brokered the deal to a local investor.

Part of the Pakenham growth corridor, Beaconsfield is 47 kilometres south east of the CBD.

Deals near $40m

The Beaconsfield sale follows HMC Capital divesting a three year old Nunawading centre for $12.8m.

Again occupied by EEL, on the busy corner of Springvale and Springfield Rd, that result reflected a 5.3pc return (story continues below).

The Nunawading asset at 86 Springvale Road.

In early March meanwhile, a Brighton asset of this type traded for $17.5m – a record for the Bayside municipality and the second priciest Victorian childcare centre to sell (that record is held by an Armadale facility which collected $20.5m last year).

An investor last month paid $17.5 million for a Brighton childcare centre.

That price demonstrated a 5.19pc return.

“There is a finite supply of modern and quality childcare centre investments available in the marketplace and the number of opportunities is only shrinking with continual feasibility challenges for developers in metropolitan locations,” Mr Peluso, who also sold Nunawading and Brighton with Mr Caspani-Muto and Mr Tat, said.

“The lack of supply will see further compression in yields and that is before we see the forecast reduction in rates at some point in the coming 6-18 months,” according to the executive.

Mr Caspani-Muto added the majority of the agency’s recent transactions have been to private investors or syndicates.

“These buyers continue to take a medium to long term view of their passive investments and are willing to overlook the short-term cost of borrowing, if they are borrowing funds at all, to secure their investment future for the next 15-plus years,” he said.

The deals come a month since we reported tenants leased two northern suburb childcare centres – at Mernda and Mill Park.

Subscribe to our newsletter at the bottom of this page.

Share or Recommend article

Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of