CBRE Continue to dominate Childcare markets across Australia

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Nov 29, 2024

CBRE Continue to dominate Childcare markets across Australia

Another CBRE Australian Healthcare and Social Infrastructure team result resetting the premium childcare market with 409-411 South Road Brighton East sold for $16,500,000, reflecting a yield of circa 4.9% in a year that continues to see some of the largest childcare transactions in Australian history.

CBRE

409-411 South Road Brighton East sold by CBRE
CBRE

409-411 South Road Brighton East sold by CBRE

409-411 South Road, Brighton East marks the sale of another trophy childcare centre in 2024. The subject property has sold for $16,500,000, reflecting a yield of circa 4.9% in a year that continues to see some of the largest childcare transactions in Australian history.

The property was sold by CBRE’s Australian Healthcare and Social Infrastructure team who have now sold close to 70% of all childcare centres over $8,000,000 nationally this year. The sale of the centre leased to Only About Children was handled by Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat.

The announcement comes just 2 months after the sale of the biggest childcare centre in 2024 being complete by the same team in Cremorne NSW.

The Brighton childcare centre was constructed in 2017 and features annual income of $823,107 long-term lease to Only About Children who were recently acquired by US listed Bright Horizons (click here).

Marcello Caspani-Muto said “The gap between private and institutional or syndicated capital continues to close. With greater certainty of future economic conditions and a desire to grow assets under management we will see these buyers become more competitive in 2025 once again. However, this being said in this instance we had numerous private buyers – both local and international competing for the property. These buyers offered unconditional terms and highly competitive cap rates.

Understanding critical industry levers and being able to install more investor confidence in the childcare sector is key in achieving true market success. “

Jimmy Tat added “We continue to see a return of Asian capital to this country. We are seeing this across the country but most importantly, these levels are equally elevated in Victoria despite implantation of foreign ownerssurcharge and the CIPT changes. Given the forecast growth in Vic buyers are looking beyond some of these costs as they feel the capital growth potential is likely to outstrip these holding costs and their buying opportunity is beginning to close as larger scale capital looks to re-enter the buy side of the market.

Of all the teams transactions this year, circa 40% have sold to international buyers, be it locally or internationally based.”

CBRE’s Recent Trophy Childcare Centre Sales Results: