Melbourne-based investment manager Folkestone Education Trust (ASX:FET) has expanded its footprint in the growing childcare centre real estate market after securing nine Queensland quality assets for more than $63 million.
CBRE’s Tom O’Driscoll negotiated the sale of the freehold Brisbane assets, which were offered with a leaseback to Avenues Early Learning.
The nine properties include; 339 Maundrell Terrace, Aspley; 93 Zahel Street, Carina; 110 Burrenbah Road, Jindalee; 51 Landis Street, McDowall; 65 Roseneath Drive, Parkinson; 88 Lister Street, Sunnybank; 385 Chatswood Road, Shailer Park, 123 Kennedy Terrace, Paddington; and 117 Agnew Street, Norman Park. The assets were each offered for sale with a 20-year leaseback agreement to Avenues Early Learning, with four five-year options available.
The properties form part of a portfolio of 13 assets offered for sale in late 2017, following Avenues Early Learning’s decision to direct its focus to expansion in the Sydney and Melbourne markets.
Mr O’Driscoll said the formal EOI campaign received more than 130 enquiries from high net worth individuals, small and large institutional funds – both domestic and offshore.
“Over the past six months, there has been a strong uptick in demand for childcare assets underpinned by recognised and credible operators. Whilst a lot of noise remains in this sector, there will be a clear difference of value in centres. Avenues Early Learning as a covenant, drives this value due to its level of performance, quality of centres and key locations,” Mr O’Driscoll said.
Folkestone Education Trust CEO Nick Anagnostou commented on the sale: “We are pleased to be able to transact with Avenues Early Learning on these quality centres. Most agents and EOI campaigns don’t allow for a broader relationship to form between the parties. Tom and CBRE had the foresight to do so and that was not only beneficial but it led to value for all parties.”
The sales campaign for the final four assets will commence shortly, with price expectations of in excess of $50 million – reflecting a potential sub 6% yield across the entire portfolio of 13 centres and total approximate value of $102 million.
“The last tranche of assets available for sale will draw a competitive list of buyers who seek to acquire a freehold with a recognised operator. These remaining centres also capture strong depreciation benefits and long term development upside given their strong locations,” Mr O’Driscoll said.
The remaining assets, which are being offered for sale in one line or individually include; 30 Jordan Terrace, Bowen Hills (230 place centre on elevated 4,549sqm site area; 24 Southgate Avenue, Cannon Hill (cnr 75 place centre on 2,028sqm site area); 624-630 Old Cleveland Road & 61a-63 Donald Street, Camp Hill (174 place centre on 1,952sqm site area); and 488 Jackson Road, Sunnybank Hills (75 place centre on 2,140sqm site area).
Established in 2003, Avenues Early Learning operates 16 centres in Brisbane and Melbourne, and has a small development pipeline of centres in Brisbane and Sydney.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), 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 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 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.
