Huge childcare portfolio could be worth $150m-plus

realcommercial.com.au

First published 30 September 2019, 11:25am

The new childcare centre at 239 Pittwater Rd in Manly.

Childcare movers and shakers Mike Wu and Shan Kuo continue to establish themselves as industry king pins after launching a divestment strategy that could net more than $150 million.

The husband and wife team will sell seven properties across three states in a move expected to draw significant investment interest.

The couple, who own childcare chains Little Lane Learning and Avenues Early Learning Centre, are continuing to acquire strategic sites where the demand for childcare supply outstrips supply.

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The properties up for grabs include 555 Glenferrie Rd in Melbourne’s blue ribbon suburb of Hawthorn, 239 Pittwater Rd, in Sydney’s Manly and in Queensland a refurbished office building at 45 Folkestone St, Bowe Hill.

Each of the properties feature fixed annual incomes between $500,000 and $1.7 million.

The childcare centre at 555 Glenferrie Rd in Hawthorn.

The properties are available individually or under a package that could represent a per-annum investment buffer of more than $7.4 million from existing tenants.

CBRE’s Sandro Peluso, Josh Twelftree, Jimmy Tat, Marcello Caspani-Muto, Aaron Arias, Toby Silk and Darren Collins have been appointed to market the portfolio.

Peluso says the package will raise eyebrows with a variety of buyers, including syndicates, high-net spenders and institutions.

“Due to the money market’s current returns and the scarcity of high-quality investment stock, we are expecting some funds which have not typically played within the educational sector to register interest in the portfolio,” Peluso says.

“The premium nature of these centres, their demonstrated high levels of occupancy and proven track record, make these some of the best quality assets on the national investment market.”

Early discussions with international investors have indicated an appetite for the portfolio, given the long term stability on offer.

“The quality of these centres is among the best nationally featuring design elements and ideas from some of the world’s best childcare architects,” Tat says.

The major childcare centre in Bowen Hills, Queensland.

The divestment follows Wu and Kuo’s sale of a portfolio of nine childcare investments for $63.2 million to Folkestone Education Trust, which has since been acquired by Charter Hall Education Trust.

The pair currently run and operate 17 centres across Australia, with another two centres opening by end of the year – bringing their total number of centres to 23, including the ones in the pipeline.

Last month, the powerhouse couple spent $20 million on a Melbourne office at 90-96 Tram Rd, Box Hill, with the site’s slated development to include a childcare centre.

Wu and Kuo have also acquired the heritage listed Drummoyne Reservoir in Sydney’s inner-west with the intention to fit it out as a multi-level childcare centre.

In 2017, they paid $60 million for a South Melbourne development site, which had been approved for four apartment buildings containing over 1000 dwellings, with construction beginning at the end of this year to develop a childcare complex licensed for 348 children.

Expected to be the largest of its kind in Australia, it will include a swimming pool, rock climbing facility and a vertical terrace adventure playground.