Ultimate land bank investment on 1,545sqm of Commercial 1-zoned major shopping strip land

Melbourne’s childcare centre market is kicking off 2024 with an offering that offers buyers the ultimate landbank investment opportunity in one of the city’s most famous shopping strips.

Fitzroys’ Chris Kombi, Tom Fisher and Ben Liu are marketing 263-265 Centre Road, Bentleigh, which is being offered to the market for the first time in 25 years. Expressions of Interest close Wednesday, 20 March at 3pm.

Expectations are around $6.5 million.

The purpose-built 93-place childcare facility has a secure 10+10+10-year lease to Evolve Early Learning, trading as Roseberry House, and owned by New Zealand publicly-listed Evolve Education Group, which has a market capitalisation of over $100 million.

Rental return is $366,352 per annum with fixed annual increases. The lease includes a redevelopment clause after the expiry of the initial 10-year term.

The facility is on a valuable Commercial 1-zoned landholding of 1,545sqm within major shopping strip Centre Road, Bentleigh, boasting a huge street frontage of 33.8 metres.

“This is the ultimate land bank investment, providing purchasers with the ultra-rare opportunity to secure an impressive childcare centre on a Commercial 1-zoned site of this size and nature within a high-performing, blue chip shopping strip.”

“Investors have the opportunity to acquire an excellent set-and-forget investment, with the asset generating a strong income with fixed annual increases from a secure lease covenant backed by public company guarantee, and located in a growing suburb with a family- dominated demographic and a high number of primary schools, offering a very healthy childcare demand dynamic both now and into the future,” Kombi said.

“Land bankers can enjoy the strong income from a quality lease covenant and great future tenancy prospects while assessing their options for the site with timeline flexibility, given the lease includes a future redevelopment clause. The favourable zoning presents future potential for multi-level development outcomes in what has been one of Melbourne’s best- performing shopping strips over recent years.

Centre Road is home to three full-line supermarkets in Coles, Woolworths, Aldi, all major banks and a host of recognised national and local traders that drives strong activity every day and into the night. According to Fitzroys’ Walk the Strip report, Centre Road has a low vacancy rate of 5.2%.

Fisher said the low vacancy rates highlight the strong trade conditions in the area, supported by excellent demographic fundamentals and a rapidly expanding residential population stemming from the many high-rise residential buildings completed within the area over the past five years as developers respond to surging commercial, retail and residential demand.

Developments in close proximity to 263-265 Centre Road include Momentum Global’s 277-279 Centre, Edenhem’s 322-328 Centre Road, and 342-346 Centre Road by Alba Property – each of seven levels – and the Moniton’s five-level 261 Centre Road. Meanwhile, Bent Street, filtering off Centre Road has seen a significant shift in development activity, including the recent construction of several multi-level apartment projects.

“All of these developments have added to the vibrancy of Centre Road, Bentleigh and enhanced trade prospects during both day and night,” Fisher said.

He added, “There’s clearly demand for development product in the area. Centre Road is evolving into a true shopping and lifestyle precinct with day and night offerings, attracting a growing immediate population.”

Liu said the area has benefited from the recently redeveloped Bentleigh Railway Station along with the removal of the level crossing creating an efficient flow of vehicular traffic along Centre Road. He added that due to the convenient accessibility to major roadways such as Nepean Highway, North Road, South Road and Warrigal Road, the Centre Road precinct draws patronage from all across metropolitan Melbourne.