Australian investors have injected more than $73 million into child care assets since August amid strengthening interest in the sector.
At CBRE’s second Premium Property Portfolio Auction (PPPA) campaign held in Melbourne, two child care assets owned by boutique family operator, Nino Early Learning Adventures, sold under the hammer for $19.5 million.
CBRE’s Mark Wizel said the sales, which set new benchmarks in the child care property sector, highlighted the strengthening appetite from investors for the asset class.
“With more than 20 years of operational experience, Nino has taken a strategic approach to acquire land, secure permits, open centres and sell the investment product into the market,” Mr Wizel said.
“The market was first exposed to Nino Early Learning Adventures in CBRE’s first Portfolio Auctions, where four centres on brand new 20-year leases sold for record results and at yields that many didn’t think were possible in the sector. This included the sale of the Malvern East Nino Early Learning Adventures centre for $16.9 million – reflecting a return of 4.20%.”
In the past three months, $73.5 million worth of childcare assets leased to Nino Early Learning Adventures has transacted on an average yield of 5.27%.
The two sales concluded in CBRE’s second PPPA campaign were 356-358 Warrigal Road, Ashburton & Lot 2, 222 Plenty Road, Bundoora. The assets transacted for combined sale price of $19.5 million, reflecting an average yield of just under 6%.
The average price point for Nino leased assets in 2017 has been $10.525 million, with the majority located within a 25km radius of the Melbourne CBD.
CBRE’s Sandro Peluso commented: “The reason this lease covenant is so highly regarded by investors is due to the group being private family owned and operated. The Nino Early Learning Adventure centres offer premium building and playground facilities, with specialised child-centric landscaping and intuitive kitchen design. Each centre is specifically designed for a progressive childcare experience, with considered elements from site layout to learning and nourishment zones.
“Child care is an undervalued asset class experiencing exceptional demand due to Melbourne’s booming population growth. Interest in the sector has also been spurred by the Federal Government’s intention to invest around $37 billion on child care support over the next four years. These key drivers along with a highly regarded lease covenant makes it an appealing asset class for investment.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
