New Rowville childcare centre investment trades for $6.9 million

A new childcare centre investment in Melbourne’s south east Rowville has sold for $6.9 million.

At 1028 Wellington Road, Greenwood Early Education Centres has signed a 15-year lease for the 124-place complex.

In 2033, it can exercise options to renew until 2048.

The 831 square metre purpose-built complex occupies a 3195 sqm site with 27 at-grade car parks.

It offers the incoming owner several years of depreciation-based tax benefits.

Greenwood, which is managed ASX-listed G8 Education, worth $1.47 billion and with a portfolio of more than 500 childcare centres, is paying all the outgoings including land tax as part of its lease.

Based on the investment’s annual rental return ($402,318), the Rowville property is selling on a 5.8 per cent net yield.

The rent is set to rise 3 per cent each year until 2033.

Burgess Rawson’s Adam Thomas, Natalie Couper and Al Bogdani marketed 1028 Wellington Road.

One of the many outdoor play areas on the 3195 square metre block.
The new centre has an internal area of 831 square metres.
The asset returns annual rent of $402,318. It traded on a 5.8 per cent yield.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco