Well Health Care (WHC) has committed to a newly refurbished Springvale South facility in the first 2023 lease for Melbourne’s aged care/NDIS sector.
CBRE’s Australian Healthcare & Social Infrastructure team of Jimmy Tat, Sandro Peluso and Marcello Caspani-Muto negotiated the 20-year deal with WHC, a group which offers a range of services including aged care, disability support and private care.
The 472-476 Springvale Road facility has been leased at an initial rental of circa $350,000 per annum, representing around $8,400 per bed, with 3.5% annual increases.
It represents the next chapter for the property, which was operated as an aged care centre until 2021 before being sold last year by Mercy Health.
Since that time, CBRE’s Australian Healthcare & Social Infrastructure team has helped advised the new owners on a significant refurbishment to capitalise on the site’s strategic location in Melbourne’s growing Springvale precinct.
Mr Tat said the site had appealed to a wide variety of operators given the area’s favourable demographics and the lack of affordable, senior living accommodation, with the building representing perhaps the only “ready for immediate use” aged care building on the market.
“As construction costs and land prices continues to increase due to economic constraints, tenants are seeing added value in opportunities where existing facilities are available for immediate use,” Mr Tat said
CBRE’s Mr Peluso said population growth in the Springfield area would make it increasingly difficult to secure development sites and this would further enhance the appeal of existing facilities.
“Feedback we received from operators during this campaign was that some form of capital injection to improve a facility or bring it up to modern building standards was very likely to increase the rental that could be achieved and give a prospective tenants confidence in committing to a longer lease term,’ Mr Peluso said.