NDIS-focused portfolio for sale as investors chase higher returns

A portfolio of seven NDIS assets, worth circa $10 million, has been listed for sale amid high demand for the asset class with investors continuing to chase higher returns in light of increased borrowing costs and economic uncertainty. 

Located across core metropolitan suburbs in Melbourne and Canberra, the seven assets are being offered individually or in-one-line. 

The assets are fully occupied individual living and specialist disability accommodation homes and have a combined annual income of $660,000.

CBRE’s Marcello Caspani-Muto, Jimmy Tat and Sandro Peluso are managing the portfolio sale via an Expression of Interest campaign closing 23 November 2023. 

The Carrum Downs, Mornington, Bellfield and Bundoora properties are all occupied by Zenitas Healthcare on 10+10-year leases expiring in December 2031. Initial rents range from $68,325 per annum to $102,723 per annum with 3.5% annual increases. 
 
The ACT asset at Stirling is leased to Disability Housing Solutions on a 10+10-year lease expiring in May 2030. The rental is $162,575 per annum with 10% annual increases.

“SDA and SIL investment opportunities are within their infancy in the Australian investment market. However, their popularity is growing at a rapid rate and for good reason. In most metropolitan cities, there is a drastic supply of quality accommodation for those participants with NDIS related SDA or SIL packages,” Mr Caspani-Muto said. 

“While not aesthetically the most impressive, the investment fundamentals of these properties are undeniable. Investors can generate higher returns than all other core asset classes on long-term leases or management agreements. In many cases, the initial investment outlay is not much greater than the median house price in the area, yet you are generating three to four times what you would in a standard residential scenario.” 

Mr Tat added, “All assets within the portfolio are on notable landholdings, many on corner placements, with the land value component often exceeding 70%, which is rare. This allows for a high yielding investment in the medium to long term with future development potential for multiple residential lots or other, subject to council approvals.”