30-year lease a boon for Geelong childcare centre
![337-339 Charlemont Rd, Armstrong Creek is the first childcare centre to be constructed in the growth area.](https://www.realcommercial.com.au/news/wp-content/uploads/2017/11/ARMSTRONGS-CREEK-CHILDCARE.jpeg)
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 purchase the Armstrong Creek facility.
The sale price realises a strong yield of almost 6%.
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CBRE agent Josh Twelftree says the result shows investors are queuing up to buy childcare centres.
He says interest was particularly high for 337-339 Charlemont Rd as it was first such facility constructed in the Armstrong Creek growth precinct and is close to the recently opened Warralily Village shopping centre.
“Childcare centres are extremely popular and anything that’s in a growth corridor goes really, really well,” Twelftree says.
![Armstrong Creek childcare](https://www.realcommercial.com.au/blog/wp-content/uploads/2017/11/ARMSTRONGS-CREEK-CHILDCARE-2.jpeg)
The new centre has been leased to Eclipse Early Education.
“Armstrong Creek is one of those growth corridors and there is a lot of confidence from investors at the moment.”
He says it was the first boardroom auction CBRE has held for a childcare centre, a move that reflects 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.
![Armstrong Creek childcare](https://www.realcommercial.com.au/blog/wp-content/uploads/2017/11/ARMSTRONGS-CREEK-CHILDCARE-3.jpeg)
The childcare centre is licensed for 118 places.
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.
Twelftree says the solid reputation of Eclipse Early Eduction, which already operates 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 says.
The Armstrong Creek result follows the $4.715 million sale of another new childcare centre at 31-33 Station Rd, Lara in September.
The inherent value of the business, underlying land value and demographics underpinned strong results in both cases.
This article from the Geelong Advertiser was originally published as “Armstrong Creek’s first childcare centre sells to local buyer”.