No kidding around as Sth Melb childcare with rooftop playground fetches $10m

97 Tope St sold for $10.25 million.
97 Tope St sold for $10.25 million.

A South Melbourne childcare centre has broken through the eight-figure mark in the biggest sale in the suburb for the year.

The four-level building at 97 Tope St was picked up for $10.25 million by a locally-based buyer, above the $9.5 million it was expected to land.

“Because it was a hop, skip and a jump from the CBD, that was one of the main drivers of interest in the property,” CBRE director Sandro Peluso says.

Commercial Insights: Subscribe to receive the latest news and updates

With the centre expected to earn an estimated $434,000 per annum from its lease to Guardian Early Learning, Mr Peluso said it was “one of the most significant child care transactions in recent times”.

The centre has a playground on the roof with city views.

Almost $6 million was spent on the building’s fit-out — the vendor wasn’t kidding around.

“For a childcare centre to hit those types of numbers — it’s a big sale,” Mr Peluso said.

“We were quoting around $8 or $9 million.”

Peluso says the underlying value of the property is the land, with a scheduled review of the land’s Commercial 2 zone in 2028.

“Its blue-chip location and flexible lease inclusions made the opportunity suitable for a range of investor profiles,” Peluso says.

The brand-new centre has a permit for 120 placings.

A recent fit-out of the building by the vendor pushed to nearly $6 million, Peluso says.

The centre opened on March 25 with a permit for 120 placings.

A Wyndham medical centre also sold for $8.2 million, with construction expected to be completed in April 2019.

The medical centre will operate on the bottom floor of 111 Overton Rd.

The 1520sqm site on the ground floor of 111 Overton Rd is fully leased to medical operator Cornerstone Health and was purchased by Barwon Investment Partners after attracting multiple offers.

Peluso says the Williams Landing precinct is quickly becoming a hub of commercial and residential activity.

This article from the Herald Sun originally appeared as “Cracking $10 million child’s play”.