Melbourne medical centre sells for $12.5 million on tight yield
A medical centre on an enormous corner block with significant future development upside has sold in Melbourne’s Caroline Springs.
The complex at 224-232 Caroline Springs Boulevard (pictured, top and left), about 25 kilometres west of the city, only hit the market last month.
It is trading for $12.5 million after being listed with price expectations of about $11 million.
Though a fully leased investment – the annual rental return is $655,189 – the 3135 square metre parcel was expected to arouse interest from high density developers which in the longer term might consider filling the airspace, perhaps with apartments or offices.
This may be part of the reason the asset’s passing yield was particularly tight – 5.2 per cent – despite having a weighted average lease expiry (WALE) of just 1.5 years.
CBRE’s Victorian Health, Aged and Child Care division promoted the property’s Comprehensive Development zoning and a potential height for a new development – about seven storeys.
The freestanding medical centre includes 1454 sqm of lettable area, leased to seven tenants, and 42 on-site car parks. It is across the road from a Quest hotel and close to two shopping centres which attract a total of about 3.7 million visitors per year.
The deal, made within a week after an expressions of interest campaign closing, was brokered by Sandro Peluso, Josh Twelftree and Jimmy Tat.
This property is not far from a medical centre, described as “flamboyant” and “resembling a nightclub”, which was opened by controversial doctor Geoffrey Edelsten at a build-cost of $2 million in 2011.
Last year a medical centre at 56 Victor Crescent, Narre Warren, sold for about $12 million to an offshore investor – again via CBRE (a copy of an ad for this campaign is below).
