Buninyong Child Care Centre Sells for $3.85m

JLL Healthcare & Life Sciences VIC team has sold the Buninyong Child Care Centre, following a competitive campaign which saw interest from local and international purchasers.

The regional child care asset, which was previously the local council offices, traded hands for $3,850,000 following a campaign which generated strong interest from a wide range of investors.

JLL’s Victorian Healthcare & Life Science head Mark Stafford, along with colleagues Jesse Radisich and Mingxuan Li, marketed the child care centre, which is situated at 309-311 Learmonth Street, via an international Expressions-Of-Interest campaign.

The campaign generated more than 75 registered enquiries, with local, interstate, international and institutional capital all reviewing the opportunity.  

JLL’s Senior Executive, Mark Stafford said, “We are continuing the see new entrants to the child care market, both institutional and private, as investors look to diversify their portfolios. The weight of new capital into the essential services market is seeing benchmark results achieved across the board.”

“The JLL Healthcare & Life Sciences Vic team has noted the serious imbalance in this sector, as the large amount of active capital continues to far out pace the supply of quality opportunities to the market” he said.

Despite the offering comprising a repurposed building and a single location operator covenant, the team was able to generate 5 unconditional offers at the close of the Expressions of Interest process.   

“12-18 months ago, 5 unconditional offers for an asset of this nature, particularly with a regional asset with a single location operator, was unheard of in the child care market. However, the onset of COVID-19 has shifted the way the community and investors see these essential assets, with long leases and government funding making them attractive opportunities.” Stafford said.

“Over this period of time, we have seen yields compress from an average return of 5.99% in 2020, to an average rate of 4.97% here in Victoria for 2022. This 102 basis point compression, is attributed by the large amounts of new capital entering the market, as both private and institutional investors look to diversify portfolios away from traditional asset classes such as office, industrial and retail, and into the essential services sector.”

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