Little Learning School Sandringham VIC Ground Floor, 18 George Street

Transcription

1 Sales Leasing Valuations Management Little Learning School Sandringham VIC Ground Floor, 18 George Street Information Memorandum Auction 11am AEDT Wednesday 9 August 2017 River Room, Crown Casino, Melbourne

2 Table of Contents Investment Features 4 Introduction 6 Key Childcare Sector Attributes 8 Property Details 12 Lease Details 13 Income Analysis 13 Tenant Profile 14 Location 16 Location Maps 17 Income Tax Savings Depreciation 19 Market Evidence 19 Sale Process 20 Contact 20 Property Management 21 Disclaimer 22 Appendices Building Plan Title & Plan Lease Schedule Depreciation Schedule 2 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 3

3 Investment Features New 15 year lease to Little Learning School to 2032 Two generous 10 year options to 2052 Little Learning School: highly successful childcare provider with 28 premium locations across Sydney and Melbourne including: Artarmon, Chatswood, Lane Cove, Pyrmont and St Leonards Annual rental increases plus market review at options Stunning purpose-built facility, licensed for 96 LDC places and part of a brand new integrated business park Prominent 1,717 sqm site on title with 20 car spaces Strategic position servicing Melbourne s desirable bayside suburbs, 16km from the CBD and close proximity to Bluff Road and Nepean Hwy Substantial taxation saving depreciation Area on-title 1,717 sqm Zoning The property is zoned Commercial (C2Z) Schedule 2 under the Bayside Planning Scheme Title Details Volume: Folio 785 Lot 1 on Plan of Subdivision Lease Term: Fifteen (15) years from 17 July 2017 to 16 July 2032 Options: Two (2) x ten (10) years from 17 July 2032 to 16 July 2052 Net Income $382,000 p.a. + GST and Outgoings Method of Sale For sale by Auction on Wednesday 9 August 2017 at 11am River Room, Crown Casino, Melbourne 4 Adam Thomas James Glen athomas@burgessrawson.com.au jamesg@nicholscrowder.com.au Natalie Couper Matt Nichols ncouper@burgessrawson.com.au mattn@nicholscrowder.com.au Information Memorandum - 18 George Street, Sandringham Burgess Rawson 5

4 Introduction Burgess Rawson is delighted to offer the freehold interest in the investment located at 18 George Street, Sandringham VIC. The Property will be for sale by way of Auction, to be held from 11.00am AEST on Wednesday 9 August 2017, at Crown Casino, Southbank, Melbourne. Burgess Rawson Since being established in 1975, our Sales, Leasing, Property Management, Valuation and Advisory services fulfil the complete and ongoing needs of our clients. Burgess Rawson has a network of offices throughout Australia and extensive regional partnerships with local property specialists, giving unmatched depth and reach in all commercial property market sectors. At every stage of ownership, our clients benefit from our specialist knowledge, experience, market insights and advice. Our strong market position, plus our targeted and effective marketing campaigns through a highly qualified database, generates maximum exposure for properties. Burgess Rawson s iconic Portfolio Auctions are held in Melbourne and Sydney bringing together a diverse range of national commercial and investment grade properties. Based on our knowledge and experience, Burgess Rawson are confident in recommending the property as an outstanding childcare investment opportunity. 6 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 7

5 Key Childcare Sector Attributes According to the Department of Education and Training report for the September 2015 quarter, the future looks bright for childcare investments with over 1.2 million children attending some form of approved childcare service in Australia. This has been steadily growing and has increased by 5.7% on the previous year. Children using Long Day Care by State and Territory September Quarter, % 34.1% 2.2% 0.8% 1.7% According to IBIS World, a baby boom is coming with the rate of births expected to increase by 6.4% over the next few years as the workforce ages. The demand for childcare is being driven by a number of industry factors including: The high cost of living driving parents back to work The desire of more women to maintain careers than in the past The government s position that female workforce participation is good for the economy. The Australian Government subsidies the cost of child care for eligible families through the Child Care Benefit and the Child Care Rebate to help parents with the cost of approved child care. During the September 2015 quarter, the total estimated expenditure on Child Care Benefit and Child Care Rebate was over $1.8 billion, 64% of which was paid in relation to families using Long Day Care services. Under the proposed federal Budget the new Child Care Subsidy will replace both existing government subsidies where families earning up to $65,000 will be able to receive up to 85% off the cost of their childcare back in subsidies. This rate reduces with higher incomes, with families earning over $170,000 potentially receiving 50% back. Nationally, total government recurrent and capital expenditure on childcare services was $8.6 billion in (an increase of 9.6% from ). Over the last five years, the average annual growth rate of real expenditure was 10.6% which may push up demand for childcare even further. Source: ABS and Department of Education and Training 8.2% 24.4% 6.2% n NSW n VIC n QLD n SA n WA n TAS n NT n ACT 8 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 9

6 10 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 11

7 Property Details Lease Details Address: 18 George Street, Sandringham VIC Title Details: Volume Folio 785 Lot 1 on Plan of Subdivision Site Area: 1,717 sqm Zoning: The property is zoned Commercial Schedule 2 (C2Z) under the Bayside Planning Scheme Lessee Lease Term Little Learning School Sandringham Pty Ltd Fifteen (15) years Lease Commenced 17 July 2017 Lease Expiry 16 July 2032 Options Two (2) further terms of ten (10) years to 16 July 2052 Outgoings Rent Reviews Security Rental All outgoings paid by the tenant excluding land tax Annual rent increases to the lesser of CPI or 3% and to market at the commencement of each further term Bank guarantee equal to three (3) months base rent and operating expenses plus GST $384,000 pa + GST and outgoings Income Analysis Rental $384,000 pa Location The subject property is situated on the western Side of George Street, 700 metres south from the intersection with Bay Road, 800 metres east from the intersection with Buff Road and 2km west from both the intersection with the Nepean Highway and Westfield Southland Building Description Architectural designed childcare facility licensed for 96 LDC places and finished to a high standard. The property comprises the following construction components. Building Construction Land Tax Net Income $2,000 (estimate on a single holding basis) $382,000 pa + GST and outgoings Sandringham is an established and highly desirable residential area and adjoins the localities of Black Rock, Cheltenham, Hampton and Highett, and is located 15 kilometres south from the Melbourne CBD. Footings: Reinforced concrete Floors: Reinforced concrete slab Floor Coverings: Combination of carpet and engineered timber with linoleum to wet areas Building Area 542 sqm External walls: Internal lining: Pre-cast concrete panels with weathertax cladding Painted plasterboard Landscaping Comprises high-end artificial turf and soft fall play equipment plus concrete paving and tan bark gardens. Further improvements include sand pits, play areas, fixed play equipment and vast decking covered by undercroft of building. Lighting: Windows: Doors: Ceilings: Car parking 20 car spaces on title Recessed flourescent tube Aluminium framed Aluminium framed Suspended acoustic tiles 12 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 13

8 Tenant Profile Little Learning School Providing high quality care since 2004, Little Learning School takes pride in the high quality of care and learning we offer. Our priority is to offer you and your child the best education and care in beautifully presented centres. Our exclusive Learn to Read programs are highly regarded in the industry as the very best early literacy program and have changed the lives of children as they prepare to begin school. The Ready to Read program will give your child the best possible start prior to school. Other classes that we offer include: Weekly language classes such as Mandarin, Japanese, French, Spanish and Italian. Music Programs with a specialist music teacher Gross Motor for improving awareness, balance and coordination Much and Groove, combining music and movement Yoga Classes for a mind, body and health experience that children enjoy Tech Computer Skills, for developing general computer skills to ensure we provide your child with the best possible start, Little Learning School is managed by a team that holds significant industry experience. This enables us to provide quality education and care for your child s pre-schooling years in an environment that allows children to explore and satisfy their natural inquisitiveness to grow as individuals. Little Learning School currently have 18 centres in the following locations across Sydney: Alexandria Ambarvale Artarmon Asquith Brookvale Caringbah Chatswood Chatswood North Croydon Park Granville Hornsby Leichhardt Macquarie Park Maroubra Penrith Pyrmont St Leonards Surry Hills Wahroonga Waitara Warriewood Due to demand from parents, the Little Learning School brand is expanding and has secured new locations in the following areas: Killarney Heights Lane Cove Panania Cheltenham, VIC Williams Landing, VIC Wyndham Vale, VIC The above is an extract from the tenants website. Learn more 14 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 15

9 Location The City of Bayside is located between 8 and 20 kilometres south of the Melbourne CBD and encompasses the suburbs of Beaumaris, Black Rock, Brighton, Brighton East, Cheltenham, Hampton, Hampton East, Highett and Sandringham. The City is bordered by 17 kilometres of beachfront overlooking Port Phillip Bay and is primarily a residential area with heritage buildings and large parks including: Cheltenham Park, Dendy Park, Elsternwick Park. The City is served by the Nepean Highway and the Sandringham and Frankston railway lines and includes traditional shopping strips and villages in Bay Street, Bluff and Balcombe Roads, Church Street and The Concourse. Popular bayside beaches such as Brighton Beach and Black Rock are located within the City along with several major golf courses including: The Royal Melbourne Golf Club, The Victoria Golf Club and Kingston Heath Golf Club in addition to various yacht and sailing clubs including Royal Brighton and Sandringham. Source: Burgess Rawson research, and 16 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 17

10 Income Tax Saving Depreciation Sale Process Taxation specialist and quantity surveyors Napier & Blakeley have provided an indicative depreciation schedule, which tables a yearly summary of capital allowances/ tax depreciation that may be claimed in order to reduce the amount of taxable income derived from this property. Please refer to attached appendix. Market Evidence Comparable sales of Melbourne childcare investments transacted by Burgess Rawson include: Method of Sale For sale by auction on Wednesday 9 August 2017 at 11.00am River Room, Crown Casino, Melbourne, VIC Flinders St Railway Yarra River Food Court Kings St P Casino River Room Palladium P Yarra Promenade Escalators Crown Towers Main Complex Entry Atrium Power St Crown Promenade Queensbridge St Date Address Sale Price Yield June 2017 Keilor Downs, 7 Copernicus Way, VIC $5,350, % June 2017 Wyndham Vale, 163 Greens Road, VIC $6,930, % May 2017 Frankston North, 14 Alpina Street, VIC $5,400, % May 2017 Deer Park, 79 Foleys Road, VIC $4,050, % April 2017 Cranbourne, 20 Elmslie Drive, VIC $5,120, % Oct 2016 Tarneit, Marengo Street, VIC $5,130, % Oct 2016 Werribee, Ballan Road, VIC $4,750, % Melbourne Exhibition Centre Clarendon St Normanby Rd Whiteman St Casino Whiteman St Crown Metropol Inspections Inspections can be arranged by prior appointment. P Multi-level Car Park Crown Conference Centre Kings Way City Rd Interstate Bidding Interstate bidding is available strictly by prior arrangement at one of Burgess Rawson s interstate offices. Terms of Sale Deposit of 10% payable upon exchange and the balance upon settlement. It is proposed the property will be offered as a going concern and if the purchaser meets the provisions of the GST legislation the sale will not incur GST. Burgess Rawson & Associates Nichols Crowder Level 7, 140 Bourke Street 358 South Road Melbourne VIC 3000 Moorabbin VIC 3189 Adam Thomas James Glen athomas@burgessrawson.com.au jamesg@nicholscrowder.com.au Natalie Couper Matt Nichols ncouper@burgessrawson.com.au mattn@nicholscrowder.com.au 18 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 19

11 Property Management Burgess Rawson is not only a market leader in investment sales; we are also regarded as highly professional property managers. With an Australia-wide management portfolio of well in excess of $2billion, we are able to equally manage property whether it is CBD, metropolitan or regionally located. More than Rental Collection - care for your property and investment. Professional property management enhances and secures your tenant relationship, provides property accounting (including tax invoicing/ GST/BAS) reports and maximises rental. We take the weight off your shoulders. Achieve $ savings - through our buying power and access to the best providers: insurance brokers, maintenance contractors etc. We have the contacts and long standing relationships to be at your disposal. Improve your cash flow - Apart from ensuring regular rental increases are enacted to maximum sustainable levels, a professional property manager reviews council rating values, as well as accessing the best taxation depreciation assessment to improve your after income tax bottom line. We aim to add more to your overall capital value. Not missing a beat - With our daily contact in the market, we hear about new developments, tenants on the move etc. Whether this information helps protect your investment or leads to further opportunities, we have our ears to the ground. Problem solvers Owning property has never been more complicated, and highly regulated. We are fully conversant with the Retail Tenancies Act, Town Planning and Occupational Health and Safety Regulations. We can anticipate and prevent problems. Experience and involvement - Our professional property managers offer a wide range of expertise. Time in the profession, and continuous improvement and involvement in the property sector is an intellectual pursuit. We can provide a pool of such experience to individual clients in a way we believe self-managed property owners cannot. Value for money - free yourself up to concentrate on the returns of your investments, rather than the daily issues which can arise from your property. The small cost involved in professional management is money well spent. We have the resources to service your needs. To discuss your particular property management s needs, please contact either your Burgess Rawson selling agent or Ingrid Filmer today. Ingrid Filmer Director Principal Property Management Department ifilmer@burgessrawson.com.au Disclaimer The information contained in the report/information memorandum has been prepared in good faith and due care by the Vendor, Burgess Rawson. Any projections contained in the report therefore, represent best estimates only and may be based on assumptions. The information contained herein is supplied without any representation as to its truth or accuracy. All interested parties should make their own enquiries to satisfy themselves in all aspects and obtain their own independent advice in order to verify any of the information. All stated dimensions and areas are approximate. The vendor does not represent or warrant the accuracy of any information contained in this document. Subject to any statutory limitation on its ability to do so, the vendor disclaims all liability under any cause of action, including negligence, for any loss arising from reliance on this document. Specifically, we make the following disclosures: All areas, measurements, boundaries, car space numbers, rents are approximate only and subject to final confirmation; The indicative depreciation schedule has been provided by Napier & Blakeley and is an estimate only and cannot be used for tax purposes. The information contained in this document is provided as a guide and an aid to further investigation by potential purchasers. Prospective purchasers should seek legal, financial and other appropriate expert advice in order t he verify the accuracy of the information presented in this document GST Disclaimer Burgess Rawson advises that the financial information in this report relating to income, outgoings and the like is provided without reference to the possible impact of GST, if any. Purchasers should make their own assessment of the impact of GST on the investments and the returns derived there from after obtaining expert professional advice. Retail Leases Act 2003 Tenant outgoings Prospective buyers should note that the recovery of outgoings from a tenant is subject to the application of and proper compliance with the Retail Leases Act 2003 (Vic). The Act applies to leases of retail premises in Victoria. If the Act applies, certain outgoings, such as land tax and some maintenance costs, cannot be recovered from the tenant. If the Act applies, other outgoings, such as management fees, can only be recovered from the tenant if the Act has been complied with. 20 Information Memorandum - 18 George Street, Sandringham Burgess Rawson 21

12 Building Plan Title & Plan Register Search Statement - Volume Folio 785 Copyright State of Victoria. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 (Cth) and for the purposes of Section 32 of the Sale of Land Act 1962 (Vic) or pursuant to a written agreement. The information is only valid at the time and in the form obtained from the LANDATA REGD TM System. The State of Victoria accepts no responsibility for any subsequent release, publication or reproduction of the information. REGISTER SEARCH STATEMENT (Title Search) Transfer of Land Act VOLUME FOLIO 785 Security no : A Produced 14/07/ :43 pm LAND DESCRIPTION Lot 1 on Plan of Subdivision B. PARENT TITLE Volume Folio 701 Created by instrument PS746015B 22/06/2017 REGISTERED PROPRIETOR Estate Fee Simple Sole Proprietor BRICKTOP TRUMEN NO. 8 PTY LTD of NATIONAL TRUST CENTRE UPPER FORT STREET OBSERVATORY HILL MILLERS POINT NSW 2000 PS746015B 22/06/2017 ENCUMBRANCES, CAVEATS AND NOTICES MORTGAGE AN168183Q 11/10/2016 WESTPAC BANKING CORPORATION Any encumbrances created by Section 98 Transfer of Land Act 1958 or Section 24 Subdivision Act 1988 and any other encumbrances shown or entered on the plan set out under DIAGRAM LOCATION below. DIAGRAM LOCATION SEE PS746015B FOR FURTHER DETAILS AND BOUNDARIES ACTIVITY IN THE LAST 125 DAYS NUMBER STATUS DATE PS746015B (S) PLAN OF SUBDIVISION Registered 22/06/2017 AQ032541Y (E) NOMINATION TO PAPER INST. Completed 11/07/ END OF REGISTER SEARCH STATEMENT Additional information: (not part of the Register Search Statement) ADMINISTRATIVE NOTICES AQ032541Y NOMINATION TO PAPER INST. 11/07/2017 ect Nominated to Discharge of Mortgage TO WESTPAC BANKING CORPORATION ect Control 16320Q WESTPAC BANKING CORPORATION Effective from 22/06/2017 OWNERS CORPORATIONS The land in this folio is affected by Information Memorandum - 18 George Street, Sandringham Burgess Rawson

13 Title & Plan Lease Schedule Information Memorandum - 18 George Street, Sandringham Burgess Rawson

14 Lease Schedule Lease Schedule Information Memorandum - 18 George Street, Sandringham Burgess Rawson

15 Depreciation Schedule Napier & Blakeley Pty Ltd ACN: Level 8, 120 Edward St Brisbane QLD 4000 T: F: Lot 1 - Childcare Centre George Street, Sandringham, VIC Indication of capital allowances deductions Year 1 ( 365 days ) TOTAL Maximum Allowances Division 40 Division 43 Annual Allowances Deductions Totals $ $ $ 101,000 34, , ,000 34, ,200 85,300 34, ,500 74,100 34, ,300 65,400 34,200 99,600 58,400 34,200 92,600 52,600 34,200 86,800 47,700 34,200 81,900 43,500 34,200 77,700 39,900 34,200 74, ,700 1,027,900 1,624,600 1,264,600 1,369,900 2,634, , , , ,000 80,000 60,000 40,000 20,000 0 Diminishing Value v Prime Cost Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Diminishing Value Max Prime Cost Max Minimum Allowances Year Division 40 Division 43 Annual Allowances Deductions Totals $ $ $ 1 ( 365 days ) 69, , , , TOTAL 59,000 51,300 45,300 40,400 36,400 33,000 30,100 27, , ,500 1,125,400 1,500,400 96,500 88,800 82,800 77,900 73,900 70,500 67,600 65,100 1,538,700 2,375,900 1,200,000 1,000, , , , ,000 0 Accumulated Depreciation Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Max Min These figures are of a general nature and should not be applied or acted upon unless supported by specific advice, they CAN NOT be used for tax purposes. Depreciation of Depreciating Assets is based on the DIMINISHING VALUE METHOD and the Division 43 Allowances are calculated on the PRIME COST METHOD. A claim will be dependent on a purchaser's tax position and the sales contract allowing the depreciation assets to be re-valued. Specific advise is available by telephoning Paul Mazoletti on Providing value in depreciation for over 30 years! Information Memorandum - 18 George Street, Sandringham