This article is from the Australian Property Journal archive
SYDNEY-based husband-and-wife team Mike Wu and Shan Kuo have put a $150 million portfolio of owner occupied childcare centres to the market, as construction of their new $100 million South Melbourne mixed use project nears.
The founders of Little Lane Learning and Avenues Early Learning Centre are selling seven assets across Sydney, Melbourne and Brisbane.
They include their newest centre, at 555 Glenferrie Rd in the inner eastern suburb of Hawthorn, which is being offered an income of $1.2 million per annum, as well as the under construction facility at 239 Pittwater Rd in Manly, which will be complete in November this year.
Of the four assets for sale in Queensland, the Bowen Hills property at 45 Folkestone Rd, previously an office building before a substantial refurbishment in 2012, is being offered with the highest annual income – $1.7 million, with the tenant covering outgoings and GST.
With a total passing income of $7.4 million per annum, all properties are being offered individually or in one-line, each with a 15-year lease.
CBRE’s Sandro Peluso, Josh Twelftree, Jimmy Tat, Marcello Caspani-Muto, Aaron Arias, Toby Silk and Darren Collins have been appointed to market the portfolio. Also included are 757 Station St in Box Hill; 624-630 Old Cleveland Rd, Camp Hill; 24 Southgate Ave, Cannon Hill; and 488 Jacksons Rd, Sunnybank Hills.
Peluso said the portfolio was expected to attract interest from a variety of buyer types, including syndicates and high-net worth individuals, as well as institutions that have traditionally focused on office or retail investments – given demographic and lifestyle shifts, demand and a lack of supply.
“Due to the money market’s current returns and the scarcity of high-quality investment stock, we are expecting some funds which have not typically played within the educational sector to register interest in the portfolio,” Peluso said. “The premium nature of these centres, their demonstrated high levels of occupancy (96.5% across all centres) and proven track record, make these some of the best quality assets on the national investment market.”
Tat said the portfolio represents a stable, long-term investment at a level that would immediate scale.
The portfolio divestment follows Wu and Kuo’s sale of a portfolio of nine childcare investments for $63.2 million to Folkestone Education Trust, which has since been acquired by Charter Hall Education Trust.
In 2017, Wu and Ms Kuo paid $60 million for a South Melbourne development site that had been approved for four apartment buildings with than over 1,000 dwellings. Construction will begin the end of this year and include a Little Lane Learning complex licensed for 348 children, with an end value of more than $100 million.
Jointly designed by world renowned Japanese-based Tezuka Architects and Milton Architecture, the 4,500 sqm, four-storey centre will feature a swimming pool, rock climbing facilities and a vertical terrace adventure playground.
Wu said it will complement inner city living by providing its children double the amount of outdoor space, as required by regulations.
He added that his company strategy was to acquire strategic sites where the demand for childcare supply outstripped supply.
The pair currently run and operate 17 centres across Australia, and including centres in the pipeline and two to be opened by the end of year, own 23. Last month, they paid $20 million for the office at 90-96 Tram Rd in Melbourne’s Box Hill, and intend to include a childcare centre within a commercial development on the property. Last year, the pair also acquired the heritage listed Drummoyne Reservoir from Sydney Water for $3.75 million with the intention to fit it out as a multi-level childcare centre.
