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Off-Market 82-Place Childcare Investment | Blue-Chip Location

Our team have secured an exceptional off-market opportunity in an 82-place childcare center in a blue-chip, family-rich suburb. It has a new lease and is at 100% occupancy with over 100 families on the waiting list. The center started operating in August 2024 and is generating an annual net income of $305,855 pa which translates into a rate of $3,685/child – a considerably fair market rate with some rental upside potential, given its excellent location and demand.

An extra long initial lease term of 20 years (until 2044) and 2 x 10-year options (2064), strengthens this asset as a ‘set-and-forget’ investment. Another strong factor of this opportunity is the Triple Net Lease, which means 100% of outgoings are fully recoverable from the tenant (including land taxes and management).

Purchase Details
Asking Price
5000000
Purchase Price
4893680
Deposit (assuming
65
% debt)
1468104
Stamp Duty
244531.65
Building Report*
2000
Solicitor Cost*
7000
Valuation*
5000
Other Fees* (Depreciation
report, bank fees)
92979.92
Total Cash Required
1819615.57
Purchase Price + Purchasing Cost
5245191.57
Net Annual Cash Flow Return
305855
Net Yield on Property
6.25
%
Net Yield Accounting for
Purchasing Costs
5.83
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
1819615.57
Cost of Loan
(Assume
6.25
% pa on
65
% debt)
214098
Return of Equity
(Pure cash flow return)
5.04
%
Return of Equity with a
5% Capital Growth Rate:
25.21
%
Return of Equity with a
7% Capital Growth Rate:
30.59
%
Return of Equity
10% Capital Growth Rate:
38.66
%
*approximate number

Key Highlights

- 1,463sqm freehold

- 38m street frontage

- Commenced at 100% occupancy

- Tenant have been operating 5 centers in WA

- ⁠Brand new high-quality build

- ⁠Significant depreciation benefits

- ⁠3% fix increases with Market Reviews every 10-years (cap and collar at 10%)

- ⁠20-year initial lease term + 2 x 10-year options (2064)

- ⁠Triple Net Lease (100% of outgoings recoverable from the tenant incl land tax and mng)

- ⁠High Socio-Demographic suburb

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