nino 2
The Ivanhoe childcare centre currently under construction. Image supplied.
  • 21 properties have been purchased for $134.3M
  • Melbourne portfolio acquired for $34.4M
  • WA portfolio acquired for $100M

Charter Hall has announced two portfolio acquisitions consisting of 21 properties for a total purchase price of $134.3 million at a yield of 4.6% for its Charter Hall Social Infrastructure REIT (ASX: CQE) fund.

Charter Hall is the largest owner of Australian early learning centres, currently partnering with over 37 childcare operators.

Victorian centres

In Melbourne, Charter Hall has purchased three childcare centres in Melbourne for $34.4 million.

The three Nino Early Learning Adventures centres in Mickleham, Craigieburn and Ivanhoe have a passing income of $1.543 million, representing a yield of 4.5%. This represents the strongest ever yield for an Australian childcare portfolio.

Mickleham opened its doors in October, with Craigieburn and Ivanhoe set to open in February. The assets span between 1,003sqm and 2,499sqm and will be leased to Nino for an initial 20-year term with fixed annual rent reviews of 3%.

Sandra Peluso, Jimmy Tat and Marcell Caspani-Muto of CBRE’s Australian Healthcare and Social Infrastructure team managed the Expressions of Interest sale campaign.

“Charter Hall has a keen understanding of demand and supply fundamentals like strong population growth, workforce participation and civic needs,” Mr Peluso said.

“Their focus on early learning centres is reflective of their financial insight and forward thinking approach in a society with ever-changing needs.

“Their investment portfolios will deliver value to their investors well into the future.”

The past 14 Nino childcare centre sales, from 2017 onwards, have been managed by the CBRE team. The combined transaction value totals over $200 million with both domestic and international buyers.

“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,” Mr Peluso added.

“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.”

The Mickleham centre. Image Supplied.

WA acquisition

In Western Australia, 18 operating childcare centres have been acquired for $100 million. 13 are located in Perth with the remaining five located regionally. The entire transaction was conducted off-market.

100% of the $4.6 million rental income is underpinned by Goodstart Early Learning Limited and G8 Education Limited – the two largest operators of childcare centres in Australia. The purchase price represents a yield of 4.63%.

Travis Butcher, Fund Manager of CQE, said the addition of these assets will result in CQE’s gross assets exceeding $1.9 billion. The fund will continue to be the largest listed social infrastructure fund in Australia.

“We are pleased to add these quality childcare properties with strong property fundamentals to the portfolio and further our tenant relationships with these three operators,” said Mr Butcher.

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