Charter Hall sells Melbourne childcare asset for $12.5m amid rising investor interest

Sale reflects yield of 4.99% as appetite grows for long-leased, socially aligned infrastructure

Charter Hall has divested a high-profile early learning centre in Melbourne’s bayside suburb of Highett for $12.5 million, as demand for premium childcare assets continues to build.

Located at 491 Highett Road, the multi-level building formerly an office was converted into a purpose-built childcare centre and is fully leased to national early learning provider Only About Children (OAC) on a 20+10+10 year agreement. The asset returns $630,456 per annum in rent.

The transaction, reflecting a sharp yield of 4.99 per cent, was brokered by CBRE’s Australian Healthcare and Social Infrastructure team and marks the latest in a series of childcare asset sales managed by the group.

The purchaser, a group of private Victorian investors, is the latest in a growing cohort of non-institutional buyers targeting early learning infrastructure as a stable, socially aligned asset class.

CBRE’s Marcello Caspani-Muto said the transaction highlights increasing signs of yield compression despite broader market caution.

“It’s no secret investors have been cautious over the past 12 months, but this sale points to renewed momentum in high-quality childcare assets,” Mr Caspani-Muto said.

“This is our fourth childcare centre to transact below a 5.5 per cent yield this year, suggesting that the window for acquiring well-valued assets is narrowing. These results are being achieved even before the full impact of tightening supply is felt.”

Fellow CBRE agent Sandro Peluso noted that private capital remains dominant in the current market cycle, but expects institutional investors to re-enter more actively as macroeconomic conditions stabilise.

“We’re seeing the gap between private and institutional capital narrowing. With growing confidence in the macroeconomic outlook and renewed appetite to grow funds under management, we anticipate institutional and syndicated buyers will become increasingly competitive throughout 2025,” he said.

Mr Peluso also pointed to emerging interest from international capital particularly Middle Eastern investors as an untapped opportunity for the Australian childcare sector.

The Highett deal marks the third childcare asset divested by Charter Hall through CBRE in the past year, following sales in Cremorne, New South Wales and Brighton, Victoria during 2024.

The move aligns with Charter Hall’s ongoing portfolio optimisation strategy, which includes recalibrating exposure across healthcare, social infrastructure and early learning assets.

With long leases, strong tenant covenants and urban infill locations, premium childcare centres are continuing to attract capital seeking secure, long-term income in defensive sectors—particularly as demand for early learning infrastructure grows across Australia’s urban corridors.

More information about CBRE childcare real estate, for sale and sold on Commo is available here.