Rare opportunity to acquire childcare centre asset with long-term secure lease

A childcare centre in Cheltenham has hit the market, offering investors the rare opportunity to acquire an asset secured by a 35-year initial lease term.

CBRE’s Australian Healthcare and Social Infrastructure team of Marcello Caspani-Muto, Sandro Peluso and Jimmy Tat are managing the sale of the property via an Expressions of Interest campaign.

Located at 1A Bernard Street, the property is leased to ASX-listed childcare provider Mayfield Childcare which has 45 locations across Australia.

The asset has an annual income of $609,993 + GST and a 35-year initial lease term to 2055 with a further option. The tenant pays all outgoings including maintenance, CAPEX, management fees and land tax on a multi-holding basis.

Mr Caspani-Muto said, “There is no question this is the best lease we’ve seen offered to the public investor market in our 10+ years as a team. An initial lease term of 35 years is almost double the longest initial leases usually seen in market. This is a truly hands off holding with notable street exposure and access from three street frontages, so the long-term land value and alternative use projects are significant.”

Mr Tat added, “An ASX-listed tenant is one thing, but international buyers will also be drawn to this asset given the outgoing recoveries. If the purchaser is a foreign owner, they can recover additional holding costs, so this is an incredible opportunity for investors.”

The recently renovated 800sqm building is situated on a corner holding that’s close to 2,500sqm with three street frontages across Chesterville Road, Clendon Court and Bernard Street.

The property is licensed for 120 children with the renovations including everything from new paint and flooring to outdoor areas and bathroom upgrades.

The Expressions of Interest campaign closes in the first week of May.