Generational Doncaster Childcare Centre in thriving Eastern Melbourne

18 September 2023

Just months after the largest ever childcare investment sale in Victorian history, another centre is poised to hit the state’s early learning investment market with all the attributes to challenge for top spot.

Imagine Early Learning, Doncaster which is located on the corner of Doncaster Road and Lauer Street is poised for an International Expressions of Interest campaign launching September 29. The property, which reached construction completion in 2022, is one of the largest and most imposing childcare offerings in the state and is easily recognised by many in Victoria’s eastern suburbs for it’s premium multi-level improvements.

The subject property which is located moments from Westfield Doncaster Shopping Town along the suburbs Golden Mile is within a core commercial precinct including BMW, Mercedes Benz and Porsche car dealerships along with a substantial volume of additional retail and commercial amenity and surrounded by schools and young families.

Formally addressed as 1 Lauer Street, the subject property is leased to national operator Imagine Early Learning who feature over 26 centres across the country. The lease structure is triple net with the tenant paying all outgoings including maintenance (structural repairs and defects), insurances, rates, management fees and land tax (multiple holding basis) and all CAPEX.

The operator pays an annual rental of $939,750 on a new 15 Year Lease Plus Options to 2048. The centre has been developed on a corner allotment of close to 2,000sqm.

The property is being marketed by CBRE’s Australian Healthcare & Social Infrastructure team of Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat. The same team just months ago set a Victorian record for the largest ever childcare transaction in state history in Armadale.

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Marcello Caspani-Muto said “In a broader investment market and economy which is undeniably experiencing its challenges, the presentation of two trophy assets the likes of Armadale and Doncaster are a testament to the resilience and on-going investment appetite toward childcare real estate. 1 Lauer Street is unquestionably one of the highest quality early learning investment offerings in the country and our team are expecting interest from a range of high-net-worth private investors along with syndicates and traditional institutional buyers. Doncaster Road has a distinguished history amongst commercial investors, and we expect this to be a substantial driver of engagement.”

Sandro Peluso added “We continue to see investors overlooking short term headwinds in relation to interest rates with many holding the view there is a significant buying opportunity over the course of 2023. This appetite has been pronounced in trophy suburbs like Doncaster and Armadale. We know the future development pipeline has declined significantly in the childcare market from both a data and first hand leasing perspective. As too much capital continues chasing too few opportunities from 2024 and beyond our team believe there will be substantial yield compression ahead, even further future rate cuts.”

Jimmy Tat who is head of the team’s Asian Services desk said “Commercial investment opportunities are plentiful in the marketplace and offshore investors have the luxury to pick and choose, but investment opportunity with a true triple net lease is hard to come by and international investors just love them, like this Imagine Early Learning Centre in Doncaster. Most of these investors are based overseas and an investment that tenants look after all outgoings including land tax and capex, provides the investor with a piece of mind and paying more now to buy and save in the long run.”