Charter Hall sells Highett childcare asset for $12.5 million

Charter Hall has sold an early learning centre in the Melbourne suburb of Highett to Victorian-based private investors for $12.5 million with the sale price reflecting a yield of 4.99%.

Located at 491 Highett Road, the multi-level building was previously used as an office before being converted to childcare centre. The property is fully leased to Only About Children (OAC) on a  20+10+10 year lease returning $630,456 per year.

The sale was managed by CBRE’s Australian Healthcare & Social Infrastructure team of Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat.

Mr Caspani-Muto said, “There is a substantial disparity in pricing between assets at present. It’s no secret investors have been wanting to keep their powder dry over the past 12 months. However, transactions like this point to signs of short-term yield compression across the sector.

“Our team has transacted four centres already this year with below yields of 5.5%. The message is simple, the window to purchase well-valued childcare assets is closing and doing so quickly. These results are being achieved prior to the real impacts of drying supply being felt so it’s likely we will see even further compression in the years to come,” he added.

Sandro Peluso said, “The gap between private and institutional or syndicated capital continues to close.  While private money is likely to continue dominating the market over the course of 2025, we do expect a near term return to buyside activity from notable and new entrant institutional buyers across our market.

“With greater certainty of future economic conditions and a desire to grow assets under management we will see these buyers become more competitive in 2025 once again. We are also seeing more buyside activity from international buyers but we have also had success this year with buyers out of the Middle East which is an untapped market in our view,” he added.

This is the third asset Australian Healthcare & Social Infrastructure team have helped Charter Hall divest in the past 12 months following landmark childcare centre transactions in Cremorne NSW and Brighton VIC in 2024.