Childcare centre demand spurs news Melbourne lease commitments

22 May 2023

Two new childcare centres have been leased in Victoria as operators continue to hunt for well-located Melbourne sites.

Birches Early Learning, Gumboots Early Learning, Guardian Childcare & Education, Kool Kidz and two private operators have all committed to new locations in deals negotiated by Marcello Caspani-Muto, Sandro Peluso and Jimmy Tat of CBRE’s Australian Healthcare & Social Infrastructure team.

“These leasing deals illustrate the demand for quality childcare facilities and the importance of strategic location, design, and collaboration between developers and operators,” Mr Peluso said.

“Well-located sites and intelligent design continue to attract interest from various operators, highlighting the robustness of the childcare market while the long-term lease agreements reflect the potential for childcare development in the area.”

In one of the latest deals, Birches Early Learning committed to a 15-year lease over a new facility at 57 McCormick’s Road, Carrum Downs.

Mr Caspani-Muto said the centre has originally been leased off the plan to another operator. When that deal fell through, it was snapped up Birches Early Learning, resulting in an improved outcome for the developer at a a rate per place of $3,600.

In another significant transaction, Gumboots Early Learning has leased a proposed childcare centre at 183-185 Melbourne Road Williamstown following a competitive Expressions of Interest campaign.

Mr Peluso said the centre’s prime location in a well-established residential area had underpinned strong occupier interest. Gumboots Early Learning has committed to a 15-year initial lease term, with the option to extend for an additional 10 years, at a rate per place of $5,416.

In the next test of market demand, the team is marketing a new Footscray centre at 102-104 Gordon Street. this sought-after property is expected to attract significant interest from multiple operators. Opportunities like this, in city fringe areas of Victoria and Sydney, are rare, making it an enticing prospect. Following the successful sale of 282/288 Geelong Rd, West Footscray (Nino Early Learning) by the same CBRE team 24 months ago, this new centre will be positioned as one of the area’s newest and highest quality offerings.

Mr. Peluso expressed, “Developers are witnessing the continued leasing momentum that our team has generated, with national operator appetite showing no signs of slowing down. This property is unique in terms of its size and location. Boasting 118 long day care (LDC) places, the demographics of the catchment area are highly enticing for any childcare providers, with a projected 176% increase in the number of children aged 0-5 years in the coming five years.”

Mr. Caspani-Muto added, “The substantial momentum we witnessed across the sector in 2022, with leasing volumes well above market averages, has paved the way for an even more successful 2023. With five centres already leased and several others under offer, our team is now preparing the next wave of leasing opportunities to bring to the market starting in April.”

Notable features of the subject property include 22 on-site car parks, its location between multiple high-density residential buildings, and its immediate proximity to public transport and retail amenities.

This exceptional opportunity presents an ideal chance for interested parties to secure a premium childcare leasing opportunity in a highly sought-after location. Interested operators and investors are encouraged to engage with CBRE’s team to explore this remarkable prospect.

Mr Peluso said the property’s highly desirable inner-city location was expected to underpin interest from multiple operators.

“With 118 long day care places, the property represents one of the highest quality new offerings in a catchment with rising childcare demand,” Mr Peluso noted.