Another monster childcare centre sale has occurred in Victoria just weeks after the sales announcement of a Brighton centre selling for close to $18,000,000.

CBRE are now single handedly responsible for the largest 4 childcare centre sales across Australia in the past 12 months, with deals across Victoria and Queensland.

CBRE’s Australian Healthcare and Social Infrastructure team of Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto have just announced the sale of 86 Springvale Road, Nunawading for $12,800,000. The sale reflects a yield of 5.3% and is a continual statement for the team in a run of recent childcare deals.

86 Springvale Road, Nunawading is one of the states largest childcare centres and operated with 154 children at near consistent capacity. The centre is tenanted by Explorers Early Learning on a 15 year term plus options.

CBRE’s Sandro Peluso said “Buyers have accepted where the cash rate is and have no immediate views they will be declining in the short term. It is not a matter of speculation anymore and this has been made clear over the past 30 days with the team traded near $30,000,000 worth of centres at a circa 5% yield.

Sophisticated investors are looking beyond short term yields and the immediate cost of debt to recognise the incredible short term buyside opportunity which exists in the marketplace. It’s not just about surface level analysis anymore, investors are analysing multiple factors such as depreciation, replacement cost and run a comparison of the return on their money in the bank vs investing in childcare centres. These are all items our team are working through with buyers and their accountants to great success. When you assume a standard childcare LVR of 60% (assuming suitable ICR coverage) we are seeing benchmark returns anywhere from 15-30% greater on investors capital for newly built centres once factoring in depreciation”

Jimmy Tat added “The volume of private international capital in the marketplace continues to surprise both buyers and agents alike. The money is there but it’s more challenging to engage buyers to act and overcome much the negative commentary they see in the media then it has ever been. It’s about understanding the personal requirements of each investors in detail and doing the work to get them answers / solutions based on the data. If this involves the engagement third party experts and completion of associated reports this is what we will do.”

The property was sold via an expressions of interest campaign with CBRE stating this level of success is not just limited to Victoria and expect to make further deal announcements in the coming weeks across the country.

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Brighton Childcare Centre sold by CBRE for $17.5m adds to Australia’s list of largest ever childcare transactions | Commo.

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