Growing demand for childcare has seen a spate of precommitments negotiated in the new year through CBRE Australian Healthcare & Social Infrastructure team.

Childcare operator King Kids will open a fifth centre in Melbourne after securing a brand-new facility in Bentleigh.

King Kids has signed a 15-year lease for 58 Patterson Road, on a net annual rent of $539,400, with construction on the centre due for completion next month.

Occupying a 1,309sqm block, the 869sqm centre has permit approval for 124 long day care places, and will accompany King Kids’ other locations in Berwick, Hallam, Narre Warren and Rowville.

CBRE’s Australian Healthcare & Social Infrastructure team of Jimmy Tat, Sandro Peluso and Marcello Caspani-Muto secured the tenancy on behalf of the private landlord.

“This is the 7th childcare leasing deal our team has transacted in the past 30 days, underlining the strong interest from operators despite the late stage of the year,” Mr Tat said.

“Childcare operators are continuing to seek sites where demographic statistics are in favour of future growth, especially looking at migration of young families and under-four population growth.

“With Bentleigh's under-four population forecast to grow by nearly 8% by 2036, the property was extremely popular among prospective tenants, with multiple enquires over the campaign.”

The Patterson Road site is less than 250 metres from Patterson train station, and just off the Nepean Highway between Centre Road and South Road.

“Premium quality buildings are always preferred with many childcare operators understanding the need for parents to be sending their kids to facilities which are considered ‘above average’,” Mr Peluso added.

“Long-term leases are still preferred, with childcare operators happy to work with developers to deliver the optimal centres for their business and learning needs.

“Developers, too, are continuing to construct premium childcare centres in high-growth areas with a lucrative market supported by government subsidies, along with childcare being considered an essential service.”

A leasing pre-commitment has been finalised with a local private operator securing their third centre to be located at 1113-1115 Main Road, Eltham. It will become the area’s newest and highest quality childcare facility with the commitment seeing the tenant remain at the location for a potential 30 years.

With metropolitan opportunities in demographically sound locations always highly sought after the expressions of interest campaign was steered by CBRE’s Australian Healthcare and Social Infrastructure team.

The process saw multiple offers received from a mixture of large scale and boutique providers. With the developer wanting to hold the project for future generations the tenant review and ultimate selection decision was made based on the hands-on approach being adopted and long-term track record within the Eltham area.

The subject property is located within immediate proximity to the train station and will feature a total building area of 1,460 sqm across two levels (permitted for 130 places).

“This outcome demonstrates the continued strength in demand across the childcare market going into 2023 and the on-going confidence operators have in relation to both government funding and demand prospects in the long-term,” Mr Peluso said.

“While demand remains strong, adequate site selection remains critical to maximise outcomes for both developers and tenants” he added.

Marcello Caspani-Muto said, “we continue to have an increased volume of conversations with developers during the site selection and feasibility process in order to ensure demographics within the catchment are aligned with the requirements of achieving a successful outcome.”

“We have seen this as the most full-proof guide to success in recent years. The subject property for example is well located under 400 metres to the Eltham station which means easy access for staff and parent pickup alike. This coupled with traditional positive demographic indicators and all the markers were in place for a highly successful childcare centre.

“Childcare has always played a significant fundamental role in the educational upbringing of Australian children and with significant growth and changes brought forward over the past five years this has positively impacted the strategy many childcare operators are taking.”

To request transaction analysis for the above leasing deals please contact CBRE’s Australian Healthcare and Social Infrastructure team of Jimmy Tat, Sandro Peluso and Marcello Caspani-Muto via the below contact details. 

Related Reading:

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Childcare operators lease in high-growth postcodes as younger populations growing faster than Melbourne metro says CBRE 

Highly rated AMIGA Montessori Centre business for sale by CBRE 

Above: 1113-1115 Main Road, Eltham leased by CBRE Healthcare & Social Infrastructure team

 Above: 58 Patterson Road, Bentleigh leased by CBRE Healthcare & Social Infrastructure team