Brighton East childcare centre offers exceptional investment opportunity with development potential

The listing of a Brighton East childcare centre leased to Only About Children, one of the country’s most prestigious childcare providers, is expected to attract significant interest from private investors.

CBRE’s Australian Healthcare and Social Infrastructure team of Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat will be managing sale via an Expressions of Interest campaign.

This listing comes just weeks after the team managed the $18.5 million sale of a childcare centre in Cremorne (NSW) – Australia’s largest childcare centre sale for 2024.

Located at 409-411 South Road, the Brighton East childcare centre was purpose-built in 2017. The property has an annual income of $823,107 and is leased to Only About Children on a 20-year double net lease with the tenant responsible for all outgoings, 50% proportion of multi holding land tax, and CAPEX (except for structural elements).

Mr Caspani-Muto said the property was a rare offering in positive market conditions.

“We continue to see private capital competing for trophy assets like this across the early learning sector driven by the belief the buy-side window of opportunity is rapidly closing,” he said. “With 10-year bond rates beginning to reach alignment with savings rates from major banks in interest bearing accounts and widespread forecasts for rate reductions in early 2025, many investors believe institutional capital will increase their acquisition volumes again from next year resulting in cap rate compression across the asset class.

“Assets with the quality of Brighton are rarely offered to market under more positive market conditions, so the unique nature of this offering coupled with this closing buy-side window is expected to drive a strong result for the centre.”

Jimmy Tat said as well as being a sound investment in the childcare sector, the site had long-term investment potential.

“This asset features all the fundamentals international buyers seek in a passive long-term investment.  A long-term lease to one of Australia’s highest quality tenants is the immediate draw card, however the long-term development potential and activity centre zoning makes this one of the most land-rich opportunities we have seen in the childcare sector. The property is positioned at the heart of the activity centre and residential development precinct. The landholding is also a true island site with no adjoining neighbours. Our team have received independent planning advice that suggests potential build form of up to seven levels, given the site’s corner location and triple street frontage.”

The Expressions of Interest closes on Thursday, October 31.