Charter Hall outlays $134.3m on childcare centres

The Ivanhhoe childcare centre is under construction.

Charter Hall Social Infrastructure REIT (CQE) has acquired 21 childcare centres via two portfolio deals.

The $134.3 million outlay reflects a 4.6 per cent passing yield.

With the deals, the fund portfolio value rises to over $1.9 billion – almost twice what it was ($1b) when the manager took it over in 2018.

The transactions also allow the manager to upgrade its FY22 distribution guidance 9.6 per cent to 17.2 cents per unit.

CQE is the country’s largest social infrastructure fund.

Seven weeks ago we reported the trust paid Fawkner Properties c$38m for an office near the Austin Hospital, in Melbourne’s north east Heidelberg.

Also last month it outlaid c$20.4m on two south east Queensland childcare centres.

The new assets

CQE’s newest childcare assets are in Melbourne and Western Australia

In the Victorian capital, the group is paying the Agosta family $34.4m for three childcare centres – two which have just opened, at Craigieburn and Mickleham (pictured, top), and another, in Ivanhoe, which will open its doors in February.

The blended yield is 4.5pc.

The vendor offered them with an initial 20 year leaseback to its Nino Early Learning Adventures brand, which now trades from 16 locations.

Fourteen of them have sold since 2017.

All up the deals have banked over $200m for the Agostas.

CBRE Healthcare and Social Infrastructure’s Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto brokered all the sales.

“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,” he added.

Several prospective purchasers contested for the latest portfolio, offering over $30m.

Some of the bids came from investors which have not yet invested in the childcare space.

“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,” according to the executive.

“In turn, these transactions give owner occupiers an opportunity to reinvest the sale proceeds back into their core business”.

Meanwhile in Western Australia, Charter Hall is paying $99.9m for the so-called Bowman Group portfolio, following an off-market negotiation.

Thirteen of these properties are in metropolitan Perth, with five in the regions.

All are rented to either Goodstart Early Learning or G8 Education Limited.

The blended WALE is 12.5 years.

Centreplace Capital and Bowman Group founder Ian Bowman with Daniel Steffe of Genera 45 brokered the sales.

“We are pleased to add these quality childcare properties with strong fundamentals to the portfolio and build on our tenant customer relationship with these three operators,” CQE fund manager Travis Butcher said.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of