This article is from the Australian Property Journal archive
THE Charter Hall Social Infrastructure REIT (CQE) has collected $134.3 million worth of childcare centres across two portfolios in Western Australia and Victoria.
The Western Australia portfolio accounts for the bulk of the purchase, with a $100 million purchase price for 13 metropolitan Perth centre and five located regionally.
The portfolio has a current weighted average lease expiry of 12.5 years and the entire income of $4.6 million each year comes from Australia’s two largest childcare operators, Goodstart Early Learning and G8 Education, for a passing yield of 4.63%.
Total combined site area is 47,157 sqm, providing accommodation for 1,752 long day care places.
Ian Bowman, founder of Centreplace Capital and Daniel Steffe of Genera 45 managed the off-market transaction.
In Melbourne, CQE has entered into sale and leaseback agreements with the Agosta family to acquire Nino Early Learning three centres in Ivanhoe, Mickleham and Craigieburn with a total of 345 places.
Each centre will be leased for an initial term of 20 years. Settlement for the Ivanhoe and Craigieburn centres will occur next month when they are completed.
The deal was handled by CBRE’s Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto.
“With a substantial volume of conforming bids received, it is clear that investment groups who historically have not played within the childcare space are pivoting toward the sector at a rapid rate,” Peluso said.
“There is particularly strong interest in leaseback transactions, which have grown in popularity in recent years and are proving to be highly attractive, as a flood of investors seek long-term income streams.
“In turn, these transactions give owner-occupiers an opportunity to reinvest the sale proceeds back into their core businesses.”
CQE’s gross assets now exceed $1.9 billion, having grown from $1 billion in 2018 when Charter Hall assumed management. The trust has a further $120 million of investment capacity after it increased its debt facilities last month by $100 million to $700 million, while it recently announced a $175.4 million portfolio valuation uplift.
On the eve of Christmas, CQE lifted its full-year forecast distribution guidance by 9.6%, from 16.9c per unit to 17.2c.
“We are pleased to add these quality childcare properties with strong property fundamentals to the portfolio and further our tenant customer relationship with these three operators,” Travis Butcher, fund manager of CQE said.
