Melbourne developer Bridport Property Group has sold a recently completed child care centre in Ringwood.
Transacting on a yield of 5.4%, the property sold to a Chinese investor for $8,200,888.
The 117-place, two-storey building at 30-32 Grey Street is currently leased to operator Kids Club Child Care on an initial 15-year lease, with two further options of 10-years each.
The large 1,677sqm landholding has a rental income of $450,000 per annum, plus GST and outgoings, with annual rental increases of 3%.
Bridport Property Group Director, Tom Shelton commented; “This is a solid outcome for an off-market transaction, which reflects the current strength of the sector as well as the great location adjacent the Maroondah Private Hospital.”
“We were well supported by our capital partner Barwon Investment Partners, backing us to ride the storm and sell into what has become a strong market for assets housing high quality essential service operators,” Mr Shelton said.
CBRE’s Healthcare & Social Infrastructure team of Sandro Peluso, Josh Twelftree, Jimmy Tat and Marcello Caspani-Muto negotiated the sale prior to a formal marketing campaign.
Mr Peluso said his team was able to place a buyer from within their specialised child care database – which they have been building since 2014 – before the property went to market.
“Current investment activity in this asset class remains as strong as ever, spurred by reduced volume activity in 2021,” Mr Peluso added.
Mr Peluso said that financial institutions remain aggressive in their lending toward child care assets, with Loan to Value Ratios circa 60-65% with some banks
“Child care is a sector that many investors – domestic and international – have historically had their doubts about in regards to continued growth year-on-year,” Mr Tat commented.
“However, ongoing government support has seen the sector emerge better off than most – cementing international buyer confidence,” Mr Tat continued.
“We’re now seeing many investors set their sights on early learning centres for 2021.”
Experts in the child care space, CBRE Healthcare & Social Infrastructure has held a circa two thirds market share in selling child care investments over the $7 million mark for the past two years: 67% in 2019 and 60% in 2020.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
