The first piece of the Moonee Valley Racecourse to be divested by the Moonee Valley Racing Club (MVRC) in more than a century hit the market last week.
The childcare centre at 2 McPherson Street, built into a historic, double-storey former chairman’s residence at the north west tip of the 40 hectare site, is expected to sell for more than $6 million.
MVRC has recently refurbished the home to create the asset.
The property has undergone a major extension – creating a childcare centre complex now measuring 854 square metres and occupying a 1295 sqm block designed with outdoor play spaces and car parking.
Nido Early School signed a 20 year lease deal for the 91-place centre at the south-east corner of Thomas Street – and moved in five months ago.
Based on the annual rent Nido pays ($350,000), the property is expected to sell on a yield of less than 5.8 per cent – consistent with deals struck this year (see our section below).
With options, the occupier can stay on at the site until 2059.
Listing comes three months after MVRC launches Moonee Valley Park redevelopment proposal
The listing of 2 McPherson Street comes shortly after MVRC was given the go-ahead to redevelop Moonee Valley Racecourse into Moonee Valley Park.
Full details, a location plan and imagery of that proposal can be found in our story, here.
In short, the $2 billion Moonee Valley Park will realign the existing track.
It will add about 2000 dwellings, accommodating up to 400 residents, including in apartment buildings at the south west and north east edge of the MVRC holding.
About 16 hectares at the centre of the track will be opened up for public use. Hospitality spaces, retail and offices also form part of the master-plan.
The grandstand will be relocated from the western boundary of the racetrack to the north (backing onto Dean Street, opposite the Moonee Ponds West Primary School, crowds will still enjoy the site’s postcard city skyline views).
Immediately around the childcare centre at 2 McPherson Street, townhouses – being marketed at present as Feehan Row – are proposed: in honour of John F Feehan, who owned the farm which made way for Moonee Valley Racecourse 135 years ago.
As part of its 2019 redevelopment, MVRC also plans to fund a tree-lining and beautification of a nearby street – Alexandra Avenue – which connects the western edge of Moonee Valley Park to the Moonee Ponds Junction public transport interchange and Puckle Street retail strip.
Queens Park is also a few hundred metres away.
Moonee Ponds a jewel in Melbourne’s north west
Moonee Ponds and the neighbouring Ascot Vale and Essendon are considered amongst the most aspirational suburbs in Melbourne’s north west.
Last year, a home in exclusive Ardmillan Road (pictured, below) traded for a Moonee Ponds record price of $10.725 million.
Mr Peluso described 2 McPherson Street as one of the most exciting childcare investments he has marketed this year.
“Moonee Ponds is just six kilometres from the Melbourne CBD and is located in a Victorian planning activity centre,” the agent said.
“With a median house price of $1.44 million, the suburb is one of the most valuable in the north west and is also one of the most sought-after family suburbs – accommodating schools including Penleigh and Essendon Grammar Girls’ Junior School, Lowther Hall, St Columba’s and St Monica’s”.
Mr Twelftree said that in recent years, Moonee Ponds has seen a wave of major development including Caydon’s mixed-use village, which is taking shape on part of the suburb’s former market site.
“Major developments are slated for sites around the Puckle Street retail strip and the Moonee Ponds train station, which is walking distance from the site,” Mr Twelftree said.
Melbourne’s childcare investment sector: 2019 highlights
We have reported extensively for the last few years about the burgeoning childcare investment sector – particularly along Australia’s east coast.
Last year, a record price of $14.8 million was paid for a complex in Sydney’s Artarmon.
Two months ago, three investments, owned by childcare centre operator Mike Wu, hit the market asking more than that (one, in Brisbane, is expected to sell for about $35 million).
Last month, Mr Wu unveiled plans to build Australia’s largest childcare centre in Southbank, walking distance to the Melbourne CBD.
In April, we reported about the sale of a South Melbourne childcare centre which cost $6.3 million to fit out (this story also contains a table with plenty more recent deals, including value and yields).
A month earlier, ASX-listed property behemoth Charter Hall paid $75.5 million for 13 childcare centre investments, in Sydney, Melbourne and Brisbane – for its Education Trust.
Childcare centre operators have more than once outbid residential developers for strategic sites, expected to form part of the wave of new stock coming into the market in 2020.