An investor has paid approximately $11 million for one of Victoria’s most-esteemed aged care homes.
The 2,895sqm site at 14-24 Pearl Street, Northcote, was sold with vacant possession, having last been operational in early-2021, and features 75 single-bed rooms across three levels.
Following a competitive Expressions of Interest campaign run by CBRE’s Australian Healthcare and Social Infrastructure team, the sale price reflects a rate of nearly $145,000 per bed.
Occupying a 69m frontage on Pearl Street, the landholding is one of the largest parcels offered in the Northcote and Clifton Hill area, 5km north of the Melbourne CBD, in a decade.
CBRE’s Marcello Caspani-Muto, Sandro Peluso and Jimmy Tat steered the sales campaign in which 10 offers were received, with three parties invited to compete in the second and final round.
“Pearl Street adds to the list of vacant aged care homes have changed hands in the past 18 months, and their trajectory in the market is only heading north,” Mr Caspani-Muto said.
“Depending on the age, quality and maintenance history, there are opportunities for investors or owner occupiers to secure an asset at below-replacement cost.
“Aged care construction costs are substantial, which creates an incredibly high barrier for developers and investors to enter the sector and means new projects are rarely feasible.”
Pearl Street is just behind High Street, one of Victoria’s most popular retail thoroughfares and connected to the Melbourne CBD via a tram line.
“Investor groups recognised the full value of Pearl Street, a blue-chip asset on a significant landholding,” Mr Peluso added.
“We are seeing more and more that astute investors realise that the aged care sector can provide excellent value with multiple options for future development.
“Although many of the alternate uses are highly-specialised, from healthcare or hospital conversions to disability services accommodation, the right groups can realise the true value of these properties.”