Kallangur’s newest childcare centre for changes hands

Chavel Capital, a Sydney-based Fund Manager, has sold Kallangur’s newest childcare centre to a Queensland-based high-net-worth investor for circa $12 million, representing Queensland’s largest childcare centre sale in recent years. 

Located at 100 Cecily Street, the childcare centre opened in June 2023 and is operated by Lead Childcare, which manages 15 centres in Queensland. 

The 4,276 sqm site was completed mid 2023 and has the capacity for 206 long day care places, it also includes a swimming pool that is available to all the families attending the centre. 

CBRE’s Sandro Peluso, Jimmy Tat, Marcello Caspani-Muto, Michael Hedger and Will Carmen brokered the deal, achieving a 5% yield, on behalf of Chauvel Capital Partners.

“The reinstatement cost for this centre was notable and a key driver of the appeal to the majority of investors, in conjunction with a covenant in Lead who is held in high regard across the Queensland childcare market.” Mr Peluso said. 

“The outcome of this sale demonstrates the strength we are seeing in investor appetite for social infrastructure-related assets which have only seen marginal yield softening over the past 12 months. As investment opportunities diminish across the sector nationally, we expect yields to compress across this space.”

Mr Tat added, “We are seeing the decline in new centre supply firsthand with permitted sites and leasing activity declining notably in the back half of this year. This is not from a lack of tenant appetite but from a pure developer feasibility perspective. We have no doubts the efforts of this decline will be seen at some point in 2024 from an investor perspective.” 

A spokesperson from Chauvel Capital said, “The childcare sector continues to see strong appetite from investors as population growth and changing work patterns continue to lift consumer demand. The right operator is imperative to performance and was a critical element to this outcome.”

“Continuing unmet demand by investors for new facilities with long-term secure cash flows unpinned our commitment to this project and this sale demonstrates the depth of capital that remains attracted to this sector.”