 Asset Class: | Child Care |
 Price: | $ 3800000 |
 Net Yield: | 7.10 % |
Net Yield - including solar strategy: | % |
 Property Market Status: | On Market |
This modern childcare investment presents a rare value-add opportunity for the astute investor, offering strong income, significant upside potential, and a prime location. With a net yield of 7.1% (true net yield of 7.4% with no stamp duty payable), this asset provides an attractive return alongside substantial future gains. Currently under-rented and positioned for rental growth, the property spans 2,205 sqm of land with a 619 sqm purpose-built childcare facility, leased to ASX-listed Mayfield Early Education. With growing demand in the area, strategic lease renegotiation could unlock an equity uplift of approximately $1.5 million, making this an exceptional opportunity to secure a high-performing asset with long-term growth potential.
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<b>Blackwood, South Australia – Suburb Overview</b><br><br>Blackwood is a well-established and highly regarded suburb in the Adelaide Hills, approximately <b>12 km south of the Adelaide CBD</b>. Known for its leafy streets, strong community feel, and blend of natural beauty with modern amenities, Blackwood is a sought-after location for families, professionals, and retirees alike.<br><br><b>Population & Growth</b><br><br>Blackwood has a stable and growing population, with a mix of long-term residents and new families drawn to its lifestyle appeal. The area benefits from <b>low residential vacancy rates</b> and steady property demand, reflecting its desirability as both a residential and investment location.<br><br><b>Economic Strength & Commercial Market</b><br><br>Blackwood serves as a key commercial hub for the surrounding hills region, with a <b>thriving retail and business district</b> along Main Road. The suburb hosts a diverse mix of <b>cafés, restaurants, supermarkets, and essential services</b>, making it a self-sufficient and convenient place to live and work. The local economy is supported by <b>strong consumer demand</b>, and commercial properties in the area enjoy <b>low vacancy rates</b>, underpinned by consistent foot traffic and a loyal customer base.<br><br><b>Transport & Connectivity</b><br><br>Blackwood is well-connected via <b>Blackwood Railway Station</b>, providing easy train access to the city. Major roads, including Shepherds Hill Road and Main Road, ensure seamless travel to Adelaide and beyond. Public transport options and <b>proximity to Flinders University and Flinders Medical Centre</b> further enhance Blackwood’s accessibility.<br><br><b>Why Invest in Blackwood?</b><br><br>With its <b>combination of strong commercial occupancy rates, sustained residential demand, and strategic location</b>, Blackwood presents a compelling opportunity for investors. South Australia’s <b>strong economic fundamentals and increasing infrastructure investment</b> further support property growth across key suburban markets like Blackwood.
Additional Location Information FileMayfield Childcare Limited (ASX: MFD) is a well-established childcare operator in Australia, with a growing national presence. Since listing on the Australian Securities Exchange (ASX) in November 2016, the company has expanded its portfolio to <b>45 childcare centers</b> across <b>Victoria, Queensland, and South Australia</b>. These centers collectively provide <b>over 4,000 registered childcare places</b>, making Mayfield a significant player in the early childhood education sector.<br><br>The company’s scale allows it to operate efficiently while maintaining high standards of care and education. With a geographically diversified footprint, Mayfield benefits from exposure to multiple markets, mitigating risk and capitalizing on population growth in key regions. The company’s presence in three states positions it strategically to meet increasing demand for quality childcare services, particularly as government support for early education continues to rise.<br><br>Mayfield Childcare’s operations are supported by a team of skilled educators and staff, ensuring that each center provides a nurturing and engaging learning environment. The company’s size also allows it to leverage economies of scale, optimizing resource allocation, administrative efficiencies, and quality assurance across its network. As it continues to expand, Mayfield is well-positioned to strengthen its market position and capitalize on growth opportunities within Australia’s childcare sector.
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Subject property: 346 Shepherds Hill Road Blackwood - 100 places - secured 7.1% - $2,698/place 212-214 Salisbury Highway Salisbury Down – 82 places – $3,134/place 559 Morphett Street, Seacombe Gardens SA – 104 places – Sold 5.5% - $6,970,000 - $3,586/place 39-41 The Grove Way Salisbury Heights – Sold 5.02% - $2,620,000 51-53 Henry Street Stepney – Sold 5.25% - $8,350,000 90-92 Pennys Hill Road Hackham – Sold 5.6% - $2,700,000
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This modern childcare investment presents a rare value-add opportunity for the astute investor, offering strong income, significant upside potential, and a prime location. With a net yield of 7.1% (true net yield of 7.4% with no stamp duty payable), this asset provides an attractive return alongside substantial future gains. Currently under-rented and positioned for rental growth, the property spans 2,205 sqm of land with a 619 sqm purpose-built childcare facility, leased to ASX-listed Mayfield Early Education. With growing demand in the area, strategic lease renegotiation could unlock an equity uplift of approximately $1.5 million, making this an exceptional opportunity to secure a high-performing asset with long-term growth potential.<br><br><br><br>Negotiated Price: $3,800,000<br>Net Yield: 7.1%<br>True net yield: 7.4% (No stamp duty)<br>Value Add: circa $1.5m<br>Huge opportunity here for the assute buyer<br><br>Property Overview<br><br>Land Size: 2,205 sqm* (regular-shaped allotment)<br>Building Size: 619 sqm* modern childcare facility<br>Features:Five (5) activity rooms + baby sleeping roomStaff room, kitchen, laundry, storage roomsToilet amenities and front receptionOn-site parking for 23 vehicles<br>Facilities:LED lighting throughoutDucted reverse cycle air conditioningSecurity system & solar panels<br>Quality Construction<br><br>Floors: Concrete slab<br>Main External Walls: Rendered Hebel panel (lightweight cladding)<br>Windows: Aluminium<br>Roof: Colorbond steel<br>Interior Linings & Ceilings: Plasterboard<br><br>Tenant & Performance<br><br>Mayfield Early Education (ASX-listed) took over in late 2024<br>Previously mismanaged where occupancy was low at 30%<br>Mayfield Early Education has potential to increase enrolement rates<br>Strong demand in the area<br><br>Prime Location<br><br>10 schools within 4km radius*<br>Blackwood Primary School just 1km away*<br><br>Upside Potential<br><br>No stamp duty payable, saving circa $180,000<br>Under-rented by circa $625 per place<br>More outgoings can be captured in future lease (~$20,000 p.a.)<br>Potential market net rent: $332,500 ($3,325 per place x 100 places) See recent rental comparisons below.<br>Market valuation uplift - Potential value: circa $5,320,000 (6.25% cap rate) See recent sales below.<br>Current value: ~$3,800,000 Potential equity uplift: circa $1,520,000<br>If tenant leaves, lease can be renegotiated to maximize returns earlier.<br><br>Challenges & Considerations<br><br>A face lift on property would attract this higher calibre tenant with plenty of equity generate to justify this<br>Lease options increase at 3% at options<br>Lease structure is not ideal for childcare (but presents future renegotiation opportunities to save $20,000)<br><br>Summary<br><br>Strong income-generating asset with high-growth potential<br>Prime location with increasing demand for childcare services<br>Strategic investment with significant upside upon lease restructuring<br>
