Cremorne childcare centre’s $18.5 million sale sets the standard as the biggest deal in the asset class this year

CBRE has successfully managed the unconditional exchange of a Cremorne childcare centre for $18.5 million – the biggest sale in the asset class this year and the largest single childcare centre sale in NSW since 2019.

The centre, which was converted from its original office usage in 2013, is leased to Only About Children (OAC) with a 14-year WALE, current passing rent of $866,826 and fixed annual increases.

The property, located at 15-19 Parraween Street, was sold via an Expressions of Interest campaign by CBRE’s Australian Healthcare and Social Infrastructure Team of Sandro Peluso, Marcello Caspani-Muto, Jimmy Tat, Toby Silk and Angus Beevers. The price reflects a yield of 4.7%

Mr Tat said a clear trend of heightened investor interest in this asset class had emerged over the past 18-months. This momentum in the market has resulted in the team managing four of Australia’s largest free-standing childcare centre sales since June 2023 with prices ranging from $12.5 million to $20.5 million.

“There has been steady interest from domestic and international buyers in the past 18-months, but we are seeing an increased appetite for high-quality childcare assets from international groups. This is reflected in increased sale prices for the asset class and this campaign was no exception.

“While we had a greater number of high-net-worth domestic investors than international investors who engaged during the campaign, the international buyers were willing to go to a pricing to level that few local buyers were expecting,” Mr Tat said.

Mr Peluso added, “Given the prime location and average annual growth in land values for the area, this was more than a standard passive childcare investment opportunity. Detailed investment summaries, inclusive of development and planning potential, land rates and alternative uses, were critical for demonstrating how this was a true generational holding for investors.”