Queensland property: The hottest commercial deals this week

Investors have poured millions of dollars into South East Queensland childcare centres while there has been a wave of service station sales. WELCOME TO HOT PROPERTY

A childcare centre and residence on a rare large inner city site in an apartment tower hotspot has been sold with the new owner eyeing its long-term development upside.

According to CoreLogic Shally Family Trust paid $3.8m for the 1338sqm site at 86 Jane St, West End, whose anchor tenant is Edge Early Learning.

Remax Commercial’s Deepen Khagram, who struck the deal on behalf of a syndicate, said the expressions of interest campaign – which when launched with a sought after price of more than $4m – attracted 78 inquiries and multiple offers.

“The interest from investors for a tenanted investment on a large land holding in the heart of West End has been outstanding during the campaign with multiple offers being presented to our vendors,” he said.

“However, It not sell at the end of the campaign but soon after we had another buyer come into the fold.

“It’s an established childcare centre with an attached residence on a large block which has future development upside. It’s very hard to get land that size and in that location – its 2km from the city and 200m from the water.”

Remax Commercial’s Deepen Khagram at the Edge Early Learning childcare centre at West End

Edge Learning has occupied the site since 2011 with the current lease expiring in 2027 with a five-year option.

As well as the childcare centre there is also a five-bedroom residence two-bathroom residence with the total annual net rent paid of $137,637. The sale realised a yield of 3.8 per cent before land tax.

According to CoreLogic the property last changed hands in 2011 for $1.55m.

Mr Khagram said there was strong demand for childcare centres.

“They’re hotly sought after, especially in high land value suburbs, like West End,” he said.

“West End has a lot of high rise developments so at some point in time the new owner might chose to develop it for a higher and better use.”

PUMPED UP

A five-year-old service station in Brisbane’s south east has been snapped up as part of a wave of sales in the once maligned asset class.

A NSW investor paid $6.52m for the Shell Viva service station at 1362 Wynnum Rd, Tingalpa, after a deal struck by Burgess Rawson’s Andrew Havig and Yosh Mendis.

Despite concerns over the impact of electric cars on the sector, the 2426sqm freehold property is part of almost $50m worth of is service station deals negotiated by Burgess Rawson in the last six months.

Mr Havig said the Tingalpa deal was sparked through the buyer having a requirement for a Brisbane metro service station.

“We had sold a number of service stations to the buyer in Sydney and he wanted to diversify into Queensland,” he said.

“He liked this one because its relatively close to the CBD, on a main road servicing 120,000 vehicles daily, directly off the Gateway Bridge turn-off, had depreciation benefits and a national tenants who pays rent 12 months in advance.

“The off-market nature of the sale underscores the attractiveness of the property and highlights the confidence of both the buyer and seller in the asset.”

Burgess Rawson’s Andrew Havig at the Shell Viva service station on Wynnum Rd, Tingalpa.

Constructed by Hutchinson Builders in 2019, Shell Viva’s current lease runs to 2031 with options. The sale realised a 6.2 per cent yield.

Over the last six months, Burgess Rawson’s as transacted 11 fuel investments worth $49.9m.

The sales include a 7-Eleven Wilsonton (Toowoomba) for $4.65m at 6.31 per cent yield; EG Ampol Wilsonton (Toowoomba) $1.23m at 5.18 per cent; Caltex & Car Wash Willawong (Brisbane) for $6.45m at 6.44 per cent; and Caltex Pimpama with specialities (Gold Coast) for $7.225m at 7.15 per cent.

Mr Havig, who struck those deals with Neville Smith, Jamie Perlinger and Tom Lawrence, the asset class remained strong be strong.

“The sales highlighted the strength of the Queensland fuel market, with investors attracted to strategically positioned convenience retail investments leased to tier-one operators,” he said.

CHILDCARE DEBUT

A private local investor has bought a new childcare centre in Ipswich’s southern suburbs as demand for the asset class continues to be strong.

The property at 1 Booking Rise, Ripley, was sold to private Brisbane-based investor for $7.6m.

The 154-place Little Locals Early Learning Group childcare centre opened in May last year and sits on a 3378sqm allotment.

Little Locals has a 15-year net lease is a privately owned business with eight childcare centres in the South East Queensland region.

CBRE’s Harrison Coburn, who brokered the deal on behalf of Clarence Property, said the sale realised a 5.4 per cent yield.

“The first-time childcare buyer was selected following a targeted off-market process, whereby CBRE approached five active groups off a recent on-market process for Lead Childcare Kallangur,” he said.

“The buyer’s short due diligence time frame allowed us to move and exchange contracts swiftly, which is a common theme we’re seeing in this sector.”

The Little Locals Early Learning childcare centre at 1 Brooking Rise in Ripley.

Mr Coburn said demand for childcare centres remained strong, with passive investors attracted by the strong income stream and triple net leases.

“While tenant operator demand is still high, we have witnessed a significant decrease in the number of new centres coming online given the rising construction costs we have experienced over the last 12 to 24 months.” he said.

“Having recently run an on-market EOI process for a childcare centre in Bahrs Scrub, it is clear that the depth of the market's still strong to start the year and is something we expect to remain constant in this sector for the remainder of 2024.”