Trophy Mt Martha childcare investment going under the hammer

Published on: 9 February 2021

A trophy childcare centre among the most impressive the industry has ever seen is shaping as a battleground for commercial property investors.

The high-end property, just metres from the beach at Mt Martha on Melbourne’s Mornington Peninsula, will be offered at auction this month as demand for the asset class continues to soar.

Offered with a 10-year lease to experienced local operator Little Acorns and with two further 10-year options, the 706sqm double-storey centre at 4 Watson Road occupies a prime 1040sqm site with views to the peninsula’s famous foreshore.

Licensed for 80 long day care places, the property returns a net rental income of $306,305 per annum plus GST, with attractive leasing terms that include 3.5% annual rent increases.

It is expected to sell in the low-mid $5 million range.

Burgess Rawson childcare specialist Adam Thomas, who is marketing the property with Natalie Couper and Shaun Venables, said the property was almost unparalleled.

“You rarely see properties of this calibre – it’s one of the best that I’ve personally inspected.”

“It’s a stunning, stunning property and a one-of-a-kind investment opportunity.”

Constructed by industry-leading builder LLOYD, the centre enjoys a location behind Mt Martha’s shopping village, which includes Ritchies Supa IGA supermarket, banks, a chemist, eateries and other complementary businesses, along with a major council car park.

With buyers set to enjoy significant depreciation benefits, Mr Thomas said the property was all but irreplaceable at its expected price point, highlighting the exceptional value on offer.

“With the land worth around $2 million, the building around $2.5 million, plus holding costs, you would expect to pay around $5 million just to replace it. It’s absolutely prime real estate,” he said.

The auction comes as childcare enjoys gold status among Australia’s commercial property asset classes, driven by ongoing government support during the COVID-19 pandemic, along with its strong investment fundamentals.

Burgess Rawson enjoyed a 100% clearance rate on six childcare centres in October, and sold a further two centres on strong yields at its year-ending Portfolio Auction in December.

Burgess Rawson’s 142nd Investment Portfolio Auction will be held at Melbourne’s Crown Casino at 11am AEDT on Wednesday, February 24.

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