The home of one of Melbourne’s strongest-performing childcare centres, Buddies Early Learning in Glen Huntly, has hit the market amid a flurry of activity in the sector.
The 920sqm site at 181 Grange Road adjoins Glen Huntly Primary school in the Glen Eira area, and has a 1,100sqm building.
The modern facility opened in 2017 and is occupied by Buddies Early Learning, one of south-east Melbourne’s most-esteemed operators with a two-year waiting list, on a 15-year lease generating annual income of $449,000 as at March 2022.
CBRE’s Healthcare & Social Infrastructure team of Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto are taking the property to market, with Expressions of Interest invited before October 27.
The listing follows the team’s transaction of the childcare centre at 255-277 Tucker Road, Ormond, for $9.365 million, reflecting a yield of 4.25%, as part of a wider early learning portfolio earlier this month.
“Childcare centres have been on an upwards trajectory in the eyes of investors over the past 18 months,” Mr Peluso said.
“That has highlighted how robust the underlying fundamentals of the market truly are, and average yields have surpassed the peaks we witnessed in 2017, now sitting between 4.15% and 4.75%.
“Investors are becoming increasingly educated on the sector, with buyers looking to diversify existing portfolios through the acquisition of one or more centres.
“Nearly $250,000,000 worth of centres have either changed hands, or are under offer, nationally via our team alone this year and we expect that number to continue to climb.”
The Grange Road site is one of two Buddies Early Learning centres, alongside the other in Bentleigh, and caters for children aged one to five across four spacious and light-filled rooms.
“The build quality and covenant associated with this centre are as good as our team has seen, and the fact the operator has a two-year waiting list is a testament to that,” Mr Caspani Muto added.
“That the centre has maintained an average occupancy rate of 93% during most of 2021 and is full for 2022, with a wait exceeding 100 families, will give investors a significant amount of confidence in their tenant for the next 20 years and beyond.
“While national early learning providers and ASX-listed groups are highly sought after by investors, and for good reason, established private operators with one, two or three centres offer significant upside.
“These groups have a strong understanding of their communities, and in many instances are locals, and are not sacrificing centre performance for operational scale.”