Melbourne’s childcare centre market is off to a strong start in 2024, with a rare centre located within one of the city’s iconic shopping strips selling for more than $6.7 million after a sale campaign that generated a huge response from local and offshore investors.
Fitzroys’ Chris Kombi, Tom Fisher and Ben Liu managed the Expressions of Interest campaign for 263-265 Centre Road, Bentleigh, which was offered to the market for the first time in 25 years. The sale price of $6,706,800 came in well above expectations and reflected a tight 4.7% yield.
More than 100 enquiries were generated during the campaign and 11 formal Expressions of Interest submitted.
The 93-place childcare facility has a 10-year lease with options to Evolve Early Learning from 2019. Evolve Early Learning trades from the site as Roseberry House and is owned by New Zealand publicly-listed Evolve Education Group, which has a market capitalisation of over $100 million.
The facility is on Commercial 1-zoned landholding of 1,545sqm with a street frontage of 33.8 metres.
“Childcare centres within popular shopping strips are rare and investors and landbankers responded accordingly,” Kombi said.
“Using our database and networks we were able to source strong interest from local and offshore capital sources, and create a competitive tension in the Expressions of Interest process that led to a very strong result.”
He said the campaign represented over $600 million of unsatisfied capital.
The purchaser was a local investor and the underbidders included domestic and overseas parties.
“Investors continue to pursue Australian commercial real estate opportunities leased to essential services. Federal government subsidies have made childcare more accessible to more parents and underpinned demand, ensuring security of tenancy,” Kombi said.
“This represented an excellent set-and-forget investment.”
“Investors were also attracted to the land-rich nature of the property, which presented as a rare chance to secure a large Commercial 1-zoned site within a high-performing shopping strip.”
Centre Road is home to three full-line supermarkets in Coles, Woolworths, Aldi, all major banks and a host of recognised national and local traders. According to Fitzroys’ Walk the Strip report, Centre Road has a low vacancy rate of 5.2%.