An investor has splashed $11.6 million on a three-storey serviced apartment complex in East Melbourne.

The sale of 160-174 Simpson Street was completed a week after the campaign closed, on a 60-day settlement, and without due diligence. The buyer is reportedly planning to continue running the 24-studio hotel as it stands.

It’s on a 1300 sq m parcel of land opposite Powlett Reserve and had been touted as a development site.

Cushman & Wakefield’s Daniel Wolman, who negotiated the speedy transaction with Oliver Hay and Leon Ma, said: “We had eight offers of which six were good enough to shortlist”.

Once the winning bidders declared they did not require due diligence, the deal was done.

The final price came in less than the $12-15 million quoted in February when the campaign was launched, but the speedy process accounts for some of that. It may also be a sign that vendors are now meeting the market to get a transaction over the line.

Operating as Birches Serviced Apartments, the property had been in the same family since the 1950s. Records show the site was purchased for just £9580.

The operator pays $361,330 a year in rent giving the deal a tight yield of 3.1 per cent.

There’s already plenty of action in East Melbourne with new luxury apartments lining the streets and two other development sites on the market recently.

Last year, developers Pelligra and Primeland listed 83-91 Albert Street for sale with plans for an $80 million 14-unit project on the 1700-square-metre site. The Lyons Development Group also tried to sell Mena House at 29-37 Simpson Street with a permit for three swank houses designed by Karl Fender.

Childcare

The stock exchange-listed HealthCo Healthcare & Wellness REIT has reaped $12.8 million, from the sale of a Nunawading childcare centre.

HealthCo, which recently turbocharged its portfolio and operations with the $1.2 billion acquisition of Healthscope’s is selling down purchases it made back in 2021 ahead of its listing.

Last year, the listed entity sold an Armadale creche for a record $20.5 million on a yield of 4.6 per cent. Nine properties earmarked for disposal in a 10-centre portfolio have sold to individual investors.

The 154-child centre at 86 Springvale Road, Nunawading, sold on a softer yield of 5.3 per cent, reflecting higher interest rates. It’s leased to Explorers Early Learning on a 15-year term.

Records indicate former publican John Finning is the buyer. The Finnings sold the historic Craig’s Royal Hotel in Ballarat to Black Rhino Group for $12 million in 2020.

CBRE’s Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto, responsible for the largest four childcare centre deals across Australia in the past year, did the deal. They declined to comment on the buyer.

But Peluso said investors “have accepted where the cash rate is and have no immediate views it will be declining in the short term. It is not a matter of speculation any more and this has been made clear over the past 30 days with the team trading near $30 million worth of centres at a circa 5 per cent yield,” Mr Peluso said.

HealthCo is part of David Di Pilla’s HMC Capital funds platform, an entity that evolved from the $725 million purchase of the Masters 700,000 sq m property portfolio in 2016.

Di Pilla recently engineered the $8.8 billion back door listing of Chemist Warehouse into ASX-listed Sigma Healthcare.

Meanwhile, another childcare centre in Bentleigh has sold for $6.7 million on a very tight yield of 4.17 per cent.

The 93-place centre at 263-265 Centre Road was on the market for the first time in 25 years. Trading as Roseberry House, the property is leased to listed New Zealand Evolve Education Group until 2029.

Fitzroys’ Chris Kombi, Tom Fisher and Ben Liu received 11 offers for the centre.

Auctions

While the year started with some slow auctions, the city’s best free theatre has put on more sparkling performances recently.

At Burgess Rawson’s portfolio auctions last week, a single party made a knockout bid for Australian Unity’s clinic at 84-88 Bridge Road, Richmond.

The imposing building, once the home of Encel Stereo, sold for $24 million, reflecting a yield of 6.34 per cent. Australian Unity paid $13.43 million in 2015.

Burgess Rawson agent Yosh Mendis said there were other potential buyers, but they did not get a chance.

“It’s pretty good buying, a 6.3 per cent yield that close to the city,” Mendis said.

Burgess Rawson sold $103 million worth of property at auctions held in Melbourne, Sydney and Brisbane.

In Dandenong, five bidders made the play for a showroom at 147 Lonsdale Street which sold for $3.18 million, more than $700,000 over reserve.

A New Zealand-based clothing company bought the 720 sq m showroom. It’s on a 1309 sq m piece of land with a short-term lease to Drummond Golf. Fitzroys’ Fisher and David Bourke handled the auction.

And in East Brunswick, Maggie’s Snacks & Liquor at 98-100 Lygon Street, sold under the hammer for $3.38 million on a yield of 4.7 per cent.

Four bidders contested the auction which was run by Fitzroys’ Kombi, Ervin Niyaz and Ben Liu under instruction from Advise Transact.