NEW PLAYER IN CHILDCARE
Local investor buys Armstrong Creek’s first early learning centre.
A NEW Geelong childcare centre with a lease until nearly 2050 has sold for $3.6 million at an in-room auction.
A local investor fought off strong competition from two offshore and three other local investors to buy the Armstrong Creek facility.
The sale price realises a strong yield of almost 6 per cent.
CBRE agent Josh Twelftree said the result showed investors were queuing up to buy childcare centres.
He said interest was particularly high for 337339 Charlemont Rd as it was the first such facility constructed in the Armstrong Creek growth precinct and was close to the newly opened Warralily Village shopping centre.
“Childcare centres are extremely popular and anything that’s in a growth corridor goes really well,” Mr Twelftree said.
“Armstrong Creek is one of those growth corridors and there is a lot of confidence from investors at the moment.”
He said it was the first boardroom auction CBRE had held for a childcare centre, a move that reflected overseas interest in the sector, particularly from Chinese investors.
Eclipse Early Education had signed a 10-year lease on the Armstrong Creek building, with two further 10-year options taking its potential tenancy to 2047.
The 992sq m purpose-built facility has a passing rental income of $230,100 per annum with annual built-in rental growth.
It is licensed for 118 places and occupies a prominent corner location with three street frontages.
Mr Twelftree said the solid reputation of Eclipse Early Eduction, which already operated 11 centres, with several others scheduled to open this year, added to attraction for buyers.
“They have got one in Torquay so they have already got a presence in the area so they know it’s going to work for them,” he said.
The Armstrong Creek result follows the $4.715 million sale of another new childcare centre at 31-33 Station Rd, Lara, in September.
Inherent value of the business, underlying land value and demographics underpinned strong results in both cases.
“Childcare centres are extremely popular and anything that’s in a growth corridor goes really well.” — CBRE agent Josh Twelftree