Six fully leased childcare centres have been put on the market as a whole or individually in the first such sale of its type in the Melbourne market. The centres are expected to meet very strong pent-up investor demand and sell between $7 to 9 million each, or $50 million for the whole portfolio.

The centres, which come to market as the Federal Government pushes through its $1.6 billion childcare package reforms providing families with fee relief of up to $3,400 a year, offer long, secure leases, blue-chip tenants, and modern, quality buildings underpinned by strong land values.

According to Savills CBD & Metropolitan Sales agents Julian Heatherich, Clinton Baxter and Benson Zhou, the properties present an unprecedented opportunity to take a strong foothold in Australia’s booming child care market.

“This is a brilliantly assembled portfolio combining exceptional landholdings, quality buildings, geographic diversity and a tenancy profile that is rarely available elsewhere in the commercial property market.

“Put this together with built-in rental growth and significant income tax depreciation benefits in a rapidly growing, government backed industry and it is an asset that will find few peers,” Mr Heatherich said.

The six centres include:

• 66-70 High Street Road, Ashwood - 15yr + 10x10yr options. Net rental $486,218 per annum
• 105A Kangaroo Road, Hughesdale - 20yr + 10yr option. Net rental $545,879 per annum
• 103-107 Koonung Road, Blackburn Nth - 20yr + 10yr option. Net rental $498,015 per annum
• 60 Florey Avenue, Point Cook - 20yr + 10yr option. Net rental $511,200 per annum
• 1 Toolambool Road, Carnegie - 20yr + 10yr option. Net rental $438,697 per annum
• 37 Venice Street, Mentone - 20yr + 10x10yr options. Net rental $367,822 per annum

Mr Baxter said the tenancy list included several highly regarded companies including ASX listed G8 Education, national provider, Guardian Early Learning and Nino Early Learning Adventures.

“This is an ideal opportunity to secure one or more state-of-the-art child care centres featuring all fundamental investment attributes including blue-chip tenants on long leases,” Mr Baxter said.

He said that investor appetite for well-located childcare investment properties is as strong as ever, with an increasing number of local and off-shore investors appreciating the combination of fundamental investment attributes available within this booming sector of the market.

With recent child care sales at yields ranging from 3.89% in Thornbury to 5.1% in Rowville, investors have a fantastic opportunity to secure genuine value and compelling rental yields in this portfolio of properties.

“There is no doubting the supreme investment credentials of these properties with state-of-the-art buildings located on prime landholdings in established suburbs,” Mr Baxter said.

He said with leases to high calibre tenants of up to 20 year leases in place, investors can buy with utmost confidence.

Mr Heatherich said key drivers of the childcare market have been the rapidly growing nature of the childcare sector, the confidence that comes from the strong support the sector has from the Federal Government, and Victoria’s strong population growth.

Victoria’s population grew by 157,500 to 6.1 million in the year to September, an increase of 2.1 percent, compared to 1.2 percent for the rest of the nation, according to reports.

And according to Department of Education and Training data, an estimated 1.67 million children attended approved care in 2015‑16 while approximately $7.3 billion was provided by governments in childcare fee assistance.

“Add secure 15 to 20 year leases and a statutory obligation for lessees to fastidiously maintain in the best possible order a facility which houses our young children, and the reason for the increase in demand is very clear,” Mr Heatherich said.

Mr Zhou said he expected strong off-shore interest in the properties given the recent surge in foreign purchases of non-CBD assets.

“These properties will attract strong interest from Asian buyers who have found the shortage of stock in their more traditional markets, particularly CBD office markets, has limited their investment opportunities and they are now scouring the markets for alternatives,” Mr Zhou said.

The properties will be sold be Expressions of Interest closing Wednesday, April 26.