$50 million Melbourne childcare portfolio for sale

Six fully leased Melbourne childcare centres are on the market selling as a group or individually with prices around $7 million to $9 million each, or $50 million for the portfolio.

The six centres include:

• 66-70 High Street Road, Ashwood -   15yr + 10x10yr options. Net rental $486,218 per annum
• 105A Kangaroo Road, Hughesdale (above) -   20yr + 10yr option. Net rental $545,879 per annum
• 103-107 Koonung Road, Blackburn Nth -  20yr + 10yr option. Net rental $498,015 per annum
• 60 Florey Avenue, Point Cook -   20yr + 10yr option. Net rental $511,200 per annum
• 1 Toolambool Road, Carnegie (below) -   20yr + 10yr option. Net rental $438,697 per annum
• 37 Venice Street, Mentone -   20yr + 10x10yr options. Net rental $367,822 per annum

Julian Heatherich from Savills said the portfolio combines exceptional landholdings, quality buildings, geographic diversity and a tenancy profile that is rarely available elsewhere in the commercial property market.

"Put this together with built-in rental growth and significant income tax depreciation benefits in a rapidly growing, government backed industry and it is an asset that will find few peers,’’ he said.

"The tenancy lists includes several highly regarded companies including ASX listed G8 Education, national provider, Guardian Early Learning, and Nino Early Learning Adventures.

"Investor appetite for well-located childcare investment properties was as strong as ever, with an increasing number of local and off-shore investors appreciating the combination of fundamental investment attributes available within this booming sector of the market.

"With recent child care sales at yields ranging from 3.89 percent in Thornbury to 5.1 percent in Rowville, investors have a fantastic opportunity to secure genuine value and compelling rental yields in this portfolio of properties."

Mr Heatherich said key drivers of the childcare market have been the rapidly growing nature of the childcare sector, the confidence that comes from the strong support the sector has from the Federal Government, and Victoria’s strong population growth.

The properties will be sold by Expressions of Interest closing Wednesday, April 26.