 Asset Class: | Childcare |
 Price: | $ 5400000 |
 Net Yield: | 6.60 % |
Net Yield - including solar strategy: | % |
 Property Market Status: | On Market |
<p class="mb-4">A high-performing childcare investment located in the heart of Newstead (Launceston), Tasmania. The property sits on a substantial freehold landholding of approximately 5,593m² and is improved with a purpose-built childcare centre licensed for 106 long day care places. Positioned within a major school catchment zone, the property benefits from strong local demand and strategic proximity to key infrastructure.</p><p class="mb-4"> </p><p class="mb-4">The asset comprises an approximately 883m² well-maintained, purpose-built childcare facility with a modern internal layout including five learning rooms, three cot rooms, kitchen, staff and office amenities, and direct access to landscaped outdoor play areas. Externally, the property offers approximately 23 on-site car spaces, generous outdoor play zones with shade structures and natural lawns, and is secured by aluminium fencing. The land parcel is irregularly shaped and zoned Community Purpose under the Tasmanian Planning Scheme.</p><p class="mb-4"> </p><p class="mb-4">The property generates a net income of approximately $355,152 per annum, and net yield of 6.6%. The asset is underpinned by a brand new 15-year net lease with fixed annual increases to the greater of CPI or 3%. The lease structure ensures income certainty with tenant responsibility for all outgoings including land tax.</p><p class="mb-4"> </p><p class="mb-4">The sole tenant is Newstead Operation Pty Ltd, trading as Newstead Childcare Centre—an established provider operating for over 20 years. The lease commences 26 September 2024 with a 15-year initial term and two 10-year renewal options to 2059. The centre is rated 'Exceeding' under the National Quality Standards and maintains a substantial waitlist, reflecting its community reputation and income stability. In order to acquire the business, the owner was required to buy the business and freehold in 2024. With the business performing exceptionally well (financials are available), and with occupancy high, the operator has a preference for just retaining the business.</p>
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<p>Newstead is a <strong>premium inner suburb</strong> located just 3.6km from Launceston's CBD, Tasmania's second-largest city and the major service centre of northern Tasmania. This strategic location offers residents the perfect blend of residential appeal and proximity to urban amenities.</p><p>The suburb is characterized by its <strong>strong educational presence</strong> with 19 schools within a 3km radius, including Newstead College, Scotch Oakburn Junior School, and Launceston Preparatory School. This concentration of educational institutions makes it particularly attractive for families.</p><p>Newstead is bounded by the North Esk River and Scotch Oakburn Park, providing natural scenic boundaries and recreational spaces. The suburb enjoys <strong>exceptional connectivity</strong> to major retailers including Coles, Woolworths, Target, and the Kmart-anchored Launceston Plaza Shopping Centre all within 1.6km.</p><p>Important social infrastructure surrounds the property, with Launceston General Hospital, Calvary St Vincent's Hospital, The Eye Hospital, and Calvary St Luke's Hospital all within 2.15km. This comprehensive access to healthcare, education, and retail amenities underpins Newstead's reputation as a <strong>highly sought-after location</strong> for families and professionals.</p>
Additional Location Information File<p>Newstead Child Care Centre is a <strong>well-established, family-owned childcare provider</strong> with over 20 years of operation in the community. The business maintains an extensive waitlist, demonstrating the high demand for its services and strong market position.</p><p>The centre is <strong>rated 'Exceeding'</strong> under the National Quality Standards, reflecting its commitment to delivering premium early childhood education. Licensed for 106 places, the facility offers five educational rooms with direct access to external play areas, creating an optimal learning environment.</p><p>The operation follows a comprehensive curriculum aligned with the National Quality Framework and Early Years Learning Framework, emphasizing a play-based educational approach. Their program includes a Preschool component led by qualified Early Childhood Teachers.</p><p>As a family-owned business, Newstead Childcare Centre maintains a strong focus on quality care and building positive relationships with children and families. The centre also demonstrates a commitment to sustainability by incorporating eco-friendly practices into daily operations.</p><p>With the Australian Government investing $4.7 billion to make childcare more affordable for families, and reforms benefiting 96% of families with children in care, the tenant operates in a sector with strong government support and future growth potential.</p>
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<p>This childcare investment offers <strong>exceptional financial fundamentals</strong> with a net income of $355,152 per annum plus GST, delivering an attractive <strong>6.6% net yield</strong> based on the purchase price of $5,400,000 (reduced from asking price of $5,800,000).</p><p>The investment is secured by a <strong>brand new 15-year net lease</strong> commencing September 2024 and extending to September 2039, with two further 10-year options potentially extending the lease to 2059. The lease includes <strong>favorable rent review mechanisms</strong> with annual increases to the greater of CPI or 3%, ensuring consistent income growth that outpaces inflation.</p><p>The tenant-friendly net lease structure places responsibility for all outgoings including land tax with the lessee, creating a true passive investment opportunity. Security is provided by two bank guarantees, each equivalent to three months' rent plus GST.</p><p>When compared to recent childcare transactions across Australia showing yields between 5.43% and 6.20%, this property's 6.6% yield represents excellent value, particularly considering the tenant's established 20+ year trading history and 'Exceeding' National Quality Standard rating.</p>
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<p class="mb-4"><strong>59B Amy Road, Newstead (Launceston) TAS – 106 places - $3,600 per place</strong></p><p class="mb-4"><strong> </strong>Howrah Childcare – 108 places - $4,400 per place</p><p class="mb-4">Devonport Childcare – 94 places - $4,365 per place</p><p class="mb-4">Launceston Childcare – 108 places - $4,825 per place</p><p class="mb-4">1 Rowitta Road, Lindisfarne TAS – 82 places - $3,252 per place</p><p class="mb-4">349 Maroondah Highway, Healesville – 92 places - $3,261 per place</p>
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<ul><li>Premium childcare investment with strong net income of $355,152 and attractive 6.6% yield</li><li>Significant discount from asking price of $5,800,000, secured for $5,400,000</li><li>Brand new 15-year net lease to 2039 with two further 10-year options extending potential tenancy to 2059</li><li>Favourable annual rent increases to the greater of CPI or 3%, ensuring consistent income growth</li><li>Tenant-friendly net lease structure with tenant responsible for all outgoings including land tax</li><li>Well-maintained 883sqm purpose-built childcare centre licensed for 106 places</li><li>Extensive 5,593sqm freehold landholding with 23 on-title car parking spaces</li><li>Strategic location in highly sought-after school catchment with four schools within 1km</li><li>Prestigious Newstead location with strong 28.2% median house price growth since Nov 2020</li><li>Excellent accessibility to major retailers including Coles, Woolworths, Target, and Kmart</li><li>Established tenant with 20+ years trading history and extensive waitlist</li><li>'Exceeding' rating under the National Quality Standards, indicating premium service delivery</li><li>Childcare investments provide defensive asset class less affected by economic cycles</li><li>Government's $4.7 billion investment making childcare more affordable for 96% of families</li></ul>
