Childcare centre to fetch ‘at least $3.5 million’

A Sunshine West commercial property is expected to fetch more than $3.5 million at auction next month.

Agent Julian Heatherich, of Savills Australia, said a shortage of childcare centres in Brimbank made the property particularly valuable to investors wanting a secure, long-term tenant.

The property is leased to G8 Education, the largest listed childcare operator in Australia with 465 centres.

Its Sunshine West business at 2 David Drive trades as Glen Gala Children’s Centre and offers 93 places for children aged eight weeks to six years.

Mr Heatherich described the property as “relatively cheap”.

“In a couple of years this will be worth $5 million because of the potential rent increase and the demand for childcare places in the west,” he said.

In April, Star Weekly reported that Brimbank parents were finding it difficult to access childcare locally because of a lack of facilities.

A recent planning permit for a new childcare centre in Cairnlea revealed the average occupancy rate at Brimbank centres was about 87 per cent.

“[It] suggests a restricted market in which most centres have solid occupancy,” it read. “Evidence suggests the market has been restricted for a number of years.”

A permit was issued for the Cairnlea early-learning centre earlier this month. Once built, the centre will cater for up to 116 children.

Western Metropolitan MP Cesar Melhem told State Parliament in March that access to childcare for local families remained “a challenge”.

“This is particularly so for parents who work irregular hours,” he said.

Savills will sell the 2216-square-metre property at 2 David Street, Sunshine West, by boardroom auction on June 8 at level 25, 140 William Street, Melbourne.

The current 10-by-five-by-five-year lease began in November, 2009, with an annual rental yield of $198,061.


commercial real estate